Hi,
My wife has a lump sum to invest and currently has a very small pension and will have no claim to state pension. She recently received redundancy and has a lump sum of ~€100k. She is not working in 2020 so cannot invest in pension or AVCs through payroll tax-free this year. Age 44.
I always assumed that it makes no sense to invest after-tax income in a pension as you don't receive any tax benefit now, and that ETFs would be the way to go.
However, the Informed Decisions podcast (https://www.informeddecisions.ie/podcast103-real-returns-invest-in-low-cost-funds-or-a-pension/) suggests that the taxation of ETFs (deemed disposal every 8 years etc, 41% exit tax etc) means that investing in a pension makes more sense even with after-tax income.
Any other take on this would be much appreciated.
My wife has a lump sum to invest and currently has a very small pension and will have no claim to state pension. She recently received redundancy and has a lump sum of ~€100k. She is not working in 2020 so cannot invest in pension or AVCs through payroll tax-free this year. Age 44.
I always assumed that it makes no sense to invest after-tax income in a pension as you don't receive any tax benefit now, and that ETFs would be the way to go.
However, the Informed Decisions podcast (https://www.informeddecisions.ie/podcast103-real-returns-invest-in-low-cost-funds-or-a-pension/) suggests that the taxation of ETFs (deemed disposal every 8 years etc, 41% exit tax etc) means that investing in a pension makes more sense even with after-tax income.
Any other take on this would be much appreciated.