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Starting a pension

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  • 04-08-2010 11:06am
    #1
    alex_b
    Closed Accounts Posts: 1 ✭


    Hi,

    I'm 32 and finally getting round to starting a pension. Since I've left it a bit late, I was thinking of maxing out my tax-free contributions to my PRSA. I.e. paying 20% of my salary into it, at least temporarily. I have some savings that I can use to make up for the shortfall in the mean time. Then, in 6-12 months, I'll reduce the amount to 10%.

    Just wondering if others think this would be a good strategy?

    Otherwise, is it possible to kickstart a PRSA with a lump sum, say 5 - 10k. But would all of this lump sum then be eligable for tax?

    Thanks for any advice


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    #2
    NewDirection
    Registered Users Posts: 223 ✭✭NewDirection


    alex_b wrote: »
    Hi,

    I'm 32 and finally getting round to starting a pension. Since I've left it a bit late, I was thinking of maxing out my tax-free contributions to my PRSA. I.e. paying 20% of my salary into it, at least temporarily. I have some savings that I can use to make up for the shortfall in the mean time. Then, in 6-12 months, I'll reduce the amount to 10%.

    Just wondering if others think this would be a good strategy?

    Otherwise, is it possible to kickstart a PRSA with a lump sum, say 5 - 10k. But would all of this lump sum then be eligable for tax?

    Thanks for any advice
    Rule of thumb, is to take your age starting a pension, half it, and thats the percentage you should pay for you to have 2/3 of your final salary when you retire.


    I think thats right, I'm sure I'll be corrected if not.


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    #3
    Mort5000
    Registered Users Posts: 419 ✭✭Mort5000


    alex_b wrote: »
    Otherwise, is it possible to kickstart a PRSA with a lump sum, say 5 - 10k. But would all of this lump sum then be eligable for tax?

    In the last few days, I read somewhere that you can deposit into a PRSA (before a particular date this year) and use last year's pension tax credits/allowance.

    If I find the link I'll update it here (or if anyone else here has details feel free to share)


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