Joining private pension plans

yesPanet

Registered User
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First of all, I should say that I know nothing about the private pension plans, so I might ask some basic stupid questions, Im sorry about it upfront. I am a non-EU citizen in my early 30s working in Ireland for almost 4 years, I manage to save around €700 each month. I used to put them into my savings account but realised that return is nothing and then there is DIRT. So I decided to invest my money into world tracker ETF and I know that Irish tax system makes me pay for deemed disposal every 8 year with 41% of my profit. Then there is capital gains tax which is a different story. I don't think I will still be in Ireland after 8 years from now on, so I am not worried about having to pay those taxes to Ireland. Ideally I will move to another EU country that has nicer tax rates for stock investments or back to my own non-EU country.

Here comes the question part, apart from paying for the regular PRSI from my payslip each month, I don't have any extra contribution to it. I know that my current employer will match my monthly contribution up to 3% of my annual salary with some private company that offers pension plans. I didn't take advantage of this till now and now I do wonder if it makes sense to use some of my monthly savings to pay for private pension plans. I know that I can move the pension plan with me to another EU country if I move to somewhere else in Europe but not to my own non-EU country.

So for this case, does it make sense to get advantage of pension contribution offered by my employer and do AVC (I hope it's the correct term) or just stick to my own saving plans and buy stocks on regular basis? I should be spending around €100-120 per month to max out my employer's contribution. But on the other hand I can also use that money to invest in my own saving plans. For now I am not planning to retire in Ireland at 60 something age.
 
If your intention is to leave Ireland and your employer is only contributing 3% to a pension, I wouldn't bother joining the scheme. You won't accumulate that much and depending on what country you move to, you may not be able to transfer it (including other EU countries). It's more hassle than its worth.


Steven
www.bluewaterfp.ie
 
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