r/irishpersonalfinance Sep 21 '21

What age are you, and how much is in your pension(s)? Retirement

With pensions in the news, I thought this would be an interesting discussion.

I am 30, and have 1 pension that currently contains €62,399.

I currently contribute 15% and my employer contributes 6%. Come January, I will up my contribution to 20%. I would have 2 pensions, but I merged them as my current one has much lower fees. My pension is 100% in Indexed Global Equity.

43 Upvotes

View all comments

1

u/[deleted] Oct 27 '21 edited Oct 27 '21

[deleted]

1

u/0mad Nov 03 '21

If you are 24, 20% is too high. You will only get tax relief on your 15% contribution. Not sure if you are aware of this or not.

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

1

u/[deleted] Nov 03 '21 edited Nov 03 '21

[deleted]

1

u/0mad Nov 04 '21

Nope, doesn't hurt. You just don't get tax relief on the extra 5%, and it is locked up with the rest of your pension - but you still get untaxed compounding growth (no deemed disposal in a Pension).

And, the more you get in early, the larger the growth potential (check this out with an online compound calculator).

An alternative (with that 5%) might be just to invest it yourself in an ETF (a well diversified one). This way, if you ever needed it you could sell up and use the cash for house, car, emergency, etc.

Also, might be worth talking to a financial advisor about this too.