Self employed pension

[chrismo]

Hi there,
I would really appreciate some advice
Age:42
Self employed
Started Executive Pension Plan with Zurich in 2011 with broker
Paused pension in 2017 due to maternity leave
I will be earning a very modest income yet to be determined as self employed, in lower tax bracket.
I have started back working and would like to resume pension payments.
Myself and husband have a mortgage of €235000
Husband contributes to his pension with New Ireland
I will receive inheritance of approx €50000
I planned to pay €50000 off mortgage and use the difference in repayments towards pension
Is this a good idea?
I was thinking of going direct to Irish Life and start consensus fund or should I stick with Zurich through broker?
Many thanks.

 

[kevhenry]

What's the purpose of paying off €50k?

If it's to reduce the term you have left then you could look at overpaying your repayments for a number of years (as long as your not penalised for doing so) and utilising your €50k better.

That's a lot of money to sacrifice when increasing your repayments could achieve the same net result i.e. reducing your mortgage term.

For example, you could place 5 years worth of overpayments in to a separate account or your mortgage account.

You could then use the balance to increase your pension contributions and get the additional tax relief or invest a lump sum.

This way, at least, you would have something to show for that capital in 5 years with the same reduced mortgage term.

Your bank would be able to give you overpayment projections and you could then do the maths for yourself to see what's best

Kevin
www.thepensionstore.ie

 

[Steven Barrett]

Are you self employed or a director of your own company? If you have an executive pension, I would assume you have a company.

Usually if paying a lump sum off the mortgage, the reduction in monthly repayments isn't that significant. But if you maintain the same monthly repayment, you will knock years off your mortgage term and get it paid much quicker.

With regards to which pension to contribute with, look at the charges of your existing one and whatever the direct sales team in Irish life sells you. Remember, the direct sales team earn their income through commissions so you are not necessarily getting a better priced pension by going direct.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)