"Why we should all aim to die broke"

[Gordon Gekko]

Going by this thread, you'd swear the country is overrun by Ross O'Carroll Kellys!!

Indeed. What's actually required is ongoing education for the next generations around prudent investment and managing one's finances. They should teach personal financial management in school.

It might help to speed up our transition from gombeen property obsessives to mature investors.

 

[Fella]

I don't think it needs to be an all or nothing thing. I'm lucky enough to have a decent chunk of savings. Over the years i've bought everything I need , so now I need very little , I just buy what I want now but I wouldn't waste money , I'm not going to buy a new car when I cycle to work etc. or travel first class every holiday when economy works fine. I think it would be foolish to spend money down to zero just so you leave nothing behind. I find one of the benefits in having a lot of savings is not having to think about spending more or saving more. Having to spend money for the sake of it would be as much a burden as having no money imo.

Whatever I have left will be left to my kids , don't care what they do with it.

 

[ardmacha]

But Ardmacha, that money has already been taxed!

Do you think it's fair that someone can earn €100, lose 55% of it in taxation, end up with €45, and have another €15 taken if they give the money to their son or daughter?

The State taking 70% of someone's money!!!

The taxation system is based on taking cuts at various stages in the process. The company pays 12.5% corporation tax, (or 0.005% if Apple), they pay you and you pay income tax, you buy goods and services and VAT is charged and those who provide the goods and services in turn pay income tax. The State accounts for 45% of the economy and this salami slicing is needed to bring in that amount without having excessive rates on any one thing. Every transaction or transfer that isn't taxed increases the rate for those things that are, it might be better to have more inheritance tax and have only 45% tax on those who get income by working. I'm very suspicious of anyone that says that such and such thing should not be taxed, as it inevitably means that other things have to be taxed more.

And I write this in a house I inherited 10 years ago, tax free!

I don't think it needs to be an all or nothing thing. I'm lucky enough to have a decent chunk of savings. Over the years i've bought everything I need , so now I need very little , I just buy what I want now but I wouldn't waste money , I'm not going to buy a new car when I cycle to work etc. or travel first class every holiday when economy works fine. I think it would be foolish to spend money down to zero just so you leave nothing behind. I find one of the benefits in having a lot of savings is not having to think about spending more or saving more. Having to spend money for the sake of it would be as much a burden as having no money imo.

Whatever I have left will be left to my kids , don't care what they do with it.

Owing to a windfall I may well have a significant cash estate left behind as I am not really a big spender by nature. But it is nice to think that if you want to see Tahiti, it is possible get a business class RTW and go there!

 

[kmick]

Newsflash folks - most of us will be broke. According to the pensions calculator a 40 year old person would need to put 25k a year into a pension for 38 years to have an annual income of 25k on retirement (not including state pension).
http://www.pensionsauthority.ie/en/Calculators/Pensions_Calculator.
How many people are paying 25k into their pension annually?

 

[trasneoir]

More seriously though, inheritance is the cause of great inequity in society.

Agreed. Our behavior suggests that we prefer "our" kids to the kids next door, and prefer the kids next door to the kids in Syria.
If you take the ethos of "equality of opportunity" to its logical conclusion, you've got to ban parenting.
If our children were to be raised under Rawls' veil of ignorance, we'd take public education and social services much, much more seriously.

 

[Leper]

Most of us here in the 50 + years love their children. But, do our children love us? Without moan we reared them, we endured recessions that make the current recession look like a doddle, we shoved them all through 1st, 2nd, 3rd Level education although most of us probably had to bail out of the education system circa 16/17 years old. We married younger. We gave them money for a start home although we had to queue up on bridging finance while waiting for a mortgage. We survived with less. Our wives gave up their jobs to ensure the kids had a better childhood. One car was enough even if you could afford a car. We bust our butts. . . . and all for our children. Would our children bust their butts for us?

When I go to the beautiful Public Service Canteen in the sky, I'll die broke at worst and in debt at best. It's about time we thought of ourselves.

 

[Grizzly]

I recently inherited a chunk of money from my parents and had to pay €50k inheritance tax on it. So did my brother and sister. My parents lived a simple life and spent very little on themselves. This caused us some grief to find their central heating switched off during the winter etc. My father had a private pension and a state pension. He lived off the state pension and saved his private pension. He ended up in a nursing home, paying €50k per annum. If my mother had lived to the same age this would have cost c €100k per annum. My father helped us out financially throughout our lives and I am grateful for my inheritance but annoyed at the tax that was paid on it and also annoyed that he was so frugal with his money when he was alive.

Both myself and my wife live simple lives and can live on relatively little. We have everything we need. We have good savings and own our own home. Neither of us want to end up in a nursing home. We would rather employ someone to live with us and take care of us.

We have discussed downsizing and upping the "spend" on ourselves, but on what?. I don't want new cars, new kitchens, bling, new furniture etc. We will continue to live in a warm comfortable home and pay tradesmen to do the jobs we can no longer do ourselves. We enjoy our holidays.

I would expect that a further inheritance tax will be paid on the inheritance tax that was already paid on my inheritance from my parents, when my children in turn inherit from us. I am having difficulty with this.

I don't know what's coming in the back mirror. The cost of everything has increased. We have new taxes that we did not have a few years back. I am helping my children now and would like to help more. My fear is not having enough for myself and my wife but leaving too much for the taxman.

 

[Steven Barrett]

Grizzly

Give your kids €3k a year each but tell them to put it in a separate account and not to be touched. If you ever need home care or nursing home care, your kids are to pay for it from that account. They can then claim tax relief on the fees that they paid for your care. That way you can reduce the inheritance tax liability for your kids and they can get a tax break for spending your money.


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

 

[Gordon Gekko]

Grizzly

Give your kids €3k a year each but tell them to put it in a separate account and not to be touched. If you ever need home care or nursing home care, your kids are to pay for it from that account. They can then claim tax relief on the fees that they paid for your care. That way you can reduce the inheritance tax liability for your kids and they can get a tax break for spending your money.


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

Better still, give them €6k each.

 

[Steven Barrett]

Better still, give them €6k each.

€3k from Mr Grizzly and another €3k from Mrs Grizzly?



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

 

[T McGibney]

The State accounts for 45% of the economy and this salami slicing is needed to bring in that amount without having excessive rates on any one thing. Every transaction or transfer that isn't taxed increases the rate for those things that are, it might be better to have more inheritance tax and have only 45% tax on those who get income by working.

Revenue took in €17.157bn in income tax & €11.153bn in VAT in 2014. Added together, those figures amount to €28.31bn.

Its total take from Capital Acquisitions Tax in the same year was just €357m.

That's just 1.2% of the income tax & VAT take, in a year when the CAT rate was 33% and thresholds were cut to the bone.

If the CAT yield was doubled and this was committed to income tax reductions, a typical worker paying an effective income tax rate of say 30% would see their rate drop to 29.7%. Hardly an exciting tax cut.

And this ignores the paradox that higher CAT rates inevitably mean lower amounts of CAT paid - as they disincentivise the making of taxable gifts.

I'm very suspicious of anyone that says that such and such thing should not be taxed, as it inevitably means that other things have to be taxed more.

No it doesn't. Control of public expenditure has to come into the equation somewhere, particularly when it is obvious that the overall tax burden is too high.

 

[demoivre]

And yes, nursing homes are incredibly expensive and you can't insure against the cost.

Why would you want to with the Fair deal scheme in operation? Unless your preferred charity is the HSE I don't see the point in saving for potential nursing home costs at all.

 

[Gordon Gekko]

€3k from Mr Grizzly and another €3k from Mrs Grizzly?



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

Yep.

And if the child is married, and affordability permits, €12k.

 

[Gordon Gekko]

Why would you want to with the Fair deal scheme in operation? Unless your preferred charity is the HSE I don't see the point in saving for potential nursing home costs at all.

So you can go where you choose, and retain control over your assets.

 

[Steven Barrett]

Yep.

And if the child is married, and affordability permits, €12k.

And they can always contribute €3k each to the person who told them the great idea

 

[Steven Barrett]

Why would you want to with the Fair deal scheme in operation? Unless your preferred charity is the HSE I don't see the point in saving for potential nursing home costs at all.

You never know if/ when you will have to go to a nursing home. When it comes to paying for nursing home fees, the HSE look at any asset dumps in the previous 5 years. That's a long enough period for an elderly person and pretty difficult to get the timing right on disposing of your assets so you can avail of the Fair Deal scheme.

Then there is the moral issue of getting the State to pick up the tab for your living costs when you have enough money to pay for themselves yourself. It's not as if children's hospitals don't have to hold fund raisers to buy machines to save children's lives...


Steven
[broken link removed]

 

[galway_blow_in]

I was also thinking about intergenerational wealth. For example with farmers.
You may be building wealth not for yourself or even the next generation, but for your descendants hundreds of years down the line.
A legitimate point of view too, in my opinion.

sorry but how are farmers any different in this regard ?

 

[galway_blow_in]

Hi PaddyW ... that's a fair enough point , however my point is that the government is responsible for ensuring a fair and just society and in that context they have through Inheritance tax the capacity to make each generation start on a level playing field.
Example : If PaddyW leaves his son a house worth say 250k that's a huge advantage for his son over and above Codogly son who got nothing ...and PaddyW's son have achieved this advantage through no effort by himself.
So in the same way that the government tells PaddyW that he cant spend his hard earned money on illegal activities (Drugs / Prostitution / weapons etc ) they government could and in me opinion control inheritances to ensure a fairer society.

paddy w may wish to see his son benefit from the fruits of his labour , how is the state anymore entitled to the fruits of paddy W than the mans own son ?

 

[galway_blow_in]

Most of us here in the 50 + years love their children. But, do our children love us? Without moan we reared them, we endured recessions that make the current recession look like a doddle, we shoved them all through 1st, 2nd, 3rd Level education although most of us probably had to bail out of the education system circa 16/17 years old. We married younger. We gave them money for a start home although we had to queue up on bridging finance while waiting for a mortgage. We survived with less. Our wives gave up their jobs to ensure the kids had a better childhood. One car was enough even if you could afford a car. We bust our butts. . . . and all for our children. Would our children bust their butts for us?

When I go to the beautiful Public Service Canteen in the sky, I'll die broke at worst and in debt at best. It's about time we thought of ourselves.

your the richest demographic in the country who benefited most from the boom and the massive appreciation in property prices , those from their mid fifties on have nothing to complain about , they had no recession compared to the youth as more senior public servants saw far less severe cuts and pensioners had no cuts at all

 

[Jon Stark]

Most of us here in the 50 + years love their children. But, do our children love us? Without moan we reared them, we endured recessions that make the current recession look like a doddle, we shoved them all through 1st, 2nd, 3rd Level education although most of us probably had to bail out of the education system circa 16/17 years old. We married younger. We gave them money for a start home although we had to queue up on bridging finance while waiting for a mortgage. We survived with less. Our wives gave up their jobs to ensure the kids had a better childhood. One car was enough even if you could afford a car. We bust our butts. . . . and all for our children. Would our children bust their butts for us?

When I go to the beautiful Public Service Canteen in the sky, I'll die broke at worst and in debt at best. It's about time we thought of ourselves.

"Without moan"?! I very much doubt you've ever done anything in this life without moan!!