This week we are finally getting round to a topic that has been on 'the list' for quite a while. One of the main benefits of pensions that 'the industry' of financial services harks on about a lot is the tax relief that is available on contributions, and that is certainly true. Having said that what is not true is that pensions are the only tax effective vehicle in which to invest in this fine country of ours, there is also (among a handful of others) the Employment and Investment Incentive Scheme as declared by the Revenue. This is the artist formerly known as Business Expansion Scheme (BES)!
We will now share the ins-and-outs of this scheme, the pros & cons and hopefully a few examples which will show how an investor (with a lump sum) might aim to reduce his or her income tax bill by investing in such a thing. Like night becomes day the rules around this Scheme can change in future but they are a reflection of things as they stand today!
As is customary I would like to welcome you to Ireland's only dedicated and straight-talking Financial Planning blog & podcast! We are on a mission to change how financial advice is done in Ireland and to help people help themselves to make decisions which will benefit them in the future. Love to hear from readers and listeners so drop me a mail here with any ideas, suggestions or questions you have and I'll be sure to reply post-haste!
Oh, regular readers might recall that we won Best Finance Blog in Ireland last year, we are short-listed again this year and the awards are on 25th October......it might be a case of 'difficult 2nd album' but sure we'll see how we go......It's not about winning it's about taking part and all that!
Charles Dickens' novel about Dr. Manette, his 18 year incarceration in Paris and subsequent relocation to London to spend time with his daughter Lucie, and all the messing that apparently ensued is meant to be quite a read. I haven't managed it myself but am reliably informed that I should. Some day I will, as soon as I have read every investment and retirement planning book in existence! A Tale of 2 Cities was set against the back-drop of the run-up to the French Revolution and one could potentially say that there may be a revolution ahead in terms of investing in Ireland, there is a groundswell building around the inconsistencies in how investments are taxed and the access to various investment options. This week we explore the tax implications of investing in 2 different vehicles in Ireland, what tax an investor will pay, and the net impact that that means over the term of an investment. It's an investment tale of 2 cities as such......I know, a very tenuous link indeed!
Welcome to Ireland's only dedicated Financial Planning Blog & Podcast, on a mission to make a positive difference in how people like you & I manage their finances and make decisions. Your input and feedback are of real importance to us so would be delighted if you were to drop us a mail with any such ideas or feedback you have here.
QFA | RPA | APA | Qualified Coach
Welcome to Ireland's only dedicated and straight-talking Personal Finance & Financial Planning Blog. We are on a mission to make a positive difference and to help people take control of their finances in a meaningful way. If you have a suggestion, question or feedback for us please do drop me a mail here, love to hear from readers.
This week we are joined in conversation with Eric Brotman from US-advisory form Brotman Financial. Eric shares with us many ideas and helps answer many questions including:
How best to prepare for 'graduating into retirement'?
What is Fiduciary Advice and how does it differ to other types of financial advice?
Should I invest a lump sum or clear my Mortgage?
He also tells us a little about the challenges faced in the US with the infamous 'student loans' situation, which if nothing else might make you feel a little better about your own situation!
Thanks for checking it out......
QFA | RPA | APA | Qualified Coach
This week we are hoping to answer several questions we have had from listeners in the past 6 weeks or so. It has been put to me that it would be valuable to share our thoughts and to explore whether it would be more beneficial to invest in a low-cost investment plan, achieve a decent level of return and pay whatever tax is due on withdrawal, or to invest into a pension, achieve the same level of return, pay what tax is due on withdrawal.......on the face of it, to me at least, it seems there will be no competition, but you know what they say about assumptions (My favourite quote about assumptions is...... 'Don't Make Assumptions'!)
Welcome to Ireland's only dedicated and straight-talking Personal Finance & Financial Planning Blog. We are on a mission to make a positive difference and to help people take control of their finances in a meaningful way. If you have a suggestion, question or feedback for us please do drop me a mail here, love to hear from readers. Oh, and one more thing, we are trying to make a difference, so if you feel anything you hear or read on this site might be useful to a friend please do send them a link......they might even thank you for it!
Invest or Pension......?
To be frank when I sat to do this analysis I wasn't sure where to start, I may have resembled the confused looking dog on the cover for a while initially! It is not a question that I have ever really been asked before in detail, so it took quite a lot of thought! The essence of the questions that I have received from listeners is, factoring-in the potential returns, fees and taxation of the 2 options, which one will yield greatest net return, an investment in a low-cost fund (if such a thing actually really exists!) or a pension in a regular managed fund!? We are making one BIG assumption here, and that is that in the investment you are paying low fees and in the pension you are paying high fees. I say this is an assumption because this is not always the case of course.....but it was the question posed so let's take it head-on!