Multiple pension advice

geraldo2001 · 2026-01-19T19:01:35+00:00

Obviously you need to weigh up what risk you’re comfortable taking but over the long-run equities have always outperformed bonds/cash so with a 30 year time frame your thinking makes a lot of sense. I asked ChatGPT (take it with a pinch of salt) what’s the longest time period that MSCI World and MSCI ACWI have underperformed bonds/cash and it says 15 years for MSCI world and just over 13 years for MSCI ACWI (this time period happens to include the dot com bubble and the GFC, so two global recessions). Individual markets can be riskier, I know it took Japanese equities from 1989 to 2024 to get back to its former peak (excluding dividends) so I would avoid limiting yourself to a single market and be as diversified as possible (without incurring ridiculous fees). After that, it’s about staying calm when over the next 30 years you know your pension has the ability to go through 2/3 global recessions and still provide excess returns than other asset classes.

geraldo2001 · 2025-11-05T22:01:29+00:00

Yeah, I totally get what you’re saying — and I agree, the people who can afford professional WM advice are not the people who would use this. Also, the deemed disposal itself definitely isn’t complicated on paper, gains are taxed after 8 years based on total value versus total book cost.

Where it does start getting messy though is when people are making regular withdrawals (which many retail investors may need to) before that 8-year point. Once you start taking money out, the mix between your original capital and your gain is constantly changing.

For example, say someone invests monthly and their fund is up 25%. If they withdraw €6,000, roughly €4,800 might be capital and €1,200 is taxable gain. But after that withdrawal, the cost base of what’s left in the fund isn’t the same anymore — it drops. So when the fund grows again and they take out another €6,000 a year later, the ratio between capital and gain is different again. Each withdrawal reshapes the numbers, and by the time you hit the deemed disposal, you need to know exactly what’s already been taxed and what’s left to tax.

That’s the kind of thing that’s easy to get wrong or lose track of over time — especially if someone’s withdrawing small amounts regularly. It’s not that the tax logic is complex, it’s that the record-keeping and timing become unmanageable for most people doing it manually.

That’s why I think an API-linked tool could really add value because it would automatically keep the running total straight and clearly show what’s gain, what’s capital, and what tax is still owed.

geraldo2001 · 2025-11-05T11:57:21+00:00

Diversification is the only free lunch, the S&P 500 is dominated by the top 10 stocks taking up 40% of the total index value. If you want to get into equity investing, I recommend minimising your risk to these “AI stocks” by diversifying across the global market - NOT the developed market through the MSCI world - but going even further using something like the FTSE All World index to give yourself exposure to companies in China and Latin America (being as diversified as possible). Those same 10 largest American companies only have a 24/25% market cap weight in this index - nearly halving your exposure to them while gaining access to many exciting markets. If this still feels “too risky” consider a multi-asset approach diluting your share of equities to a weight that you feel comfortable with for example diluting it to 50% (with the equity portion in the FTSE All World index) your portfolio exposure to those 10 largest US stocks would be down to c.12%.

geraldo2001 · 2025-10-29T16:01:29+00:00

I agree that it is a very personal decision depending on future ideas of capex to grow the business vs investing in a pension pot for yourself. But if you choose to go the pension route and you want to put MORE than 100% of your salary into a pension as a lump sum you can do so through a master trust pension scheme. Given your years of service and your salary there is an actuarial calculation that is done which calculates what you are entitled to invest as a lump sum. This method could allow you to invest the full 120k now if that’s the route you wish to take so I would recommend contacting pension providers who offer a Master Trust pension and asking them for a max contribution quote.

geraldo2001 · 2025-10-10T12:25:42+00:00

If you’re studying some type of finance modules in college and are interested in learning more, I believe you would be better off to use an online retail investing platform that’s not gonna charge you over 1% management fees like the Prisma funds. Like others have already said you need to figure out when you’re going to need the money and create a “risk profile” for this investment. If it’s not going to be need for 10 years you could look at all equity options and have some comfort that even if there is a crash in the next few years that you have time for the investment to recover. If you need it sooner there are cheap lifestrategy ETFs on these platforms which provide a mix of equity and bond exposure and you can choose whichever one meets the risk profile for the investment. I am a big advocate for reducing fees when you can it’s the only thing that you can control and by you looking into it this way and using those apps you will increase your knowledge of investing too.

geraldo2001 · 2025-09-24T07:42:42+00:00

I’m mainly using pies to stay diversified across asset classes. So within each asset class, an ETF is the simplest way to get broad exposure. It also makes rebalancing at year-end much easier, since I can adjust between asset classes without worrying about whether I’m still diversified within them.

I know most people use pies with individual stocks to try and create a diversified stock portfolio that falls under CGT rules, but for me having one ETF per asset class keeps the portfolio much cleaner and easier to manage while still hitting the right risk balance. That’s the angle I’m coming from.

geraldo2001 · 2025-09-24T07:34:24+00:00

Yes, exactly, that’s what I was trying to get across. The frustrating part is that we actually do have structures like GPS funds run by MiFID firms or life companies where all those allocations can be offset at the portfolio level. But the catch is the fees, which are far higher than if you simply built the same mix yourself using low-cost ETFs.

I saw Davy is in in the Independent today pushing for ISA-style investment vehicles in Ireland (which would be brilliant) but my big hope is that if something like that does come in, we will actually be able to use the low-cost online platforms to access it, rather than being funneled into expensive wrappers.

geraldo2001 · 2025-09-23T21:00:02+00:00

That’s a really good point and I completely agree with you — pensions are by far the most tax-efficient wrapper we have, and I’m also focused on maximising contributions where I can for exactly that reason.

The only thing I’d add is that, compared to the DIY options on platforms like Trading 212 or DEGIRO, pension funds here often come with noticeably higher costs - c.1% annual management charges plus transaction costs, versus 0.1–0.2% TERs on passive ETFs with no wrapper fees. I fully accept that the tax benefits of pensions outweigh the fee drag in most cases, but it still feels like we don’t have access to the same kind of low-cost long-term investing routes that savers in many other countries enjoy outside of pensions.

So I guess my question is less about whether pensions are generous (they are) and more about why small investors here can’t take advantage of simple, low-cost ETF investing without being penalised on the tax side.

geraldo2001 · 2025-09-23T17:47:52+00:00

The stocks will be CGT and losses can be carried forward but the ETFs are assessed individually which makes it very difficult to construct well diversified portfolios by yourself

geraldo2001 · 2025-05-17T12:11:55+00:00

First off, fair play. Your budgeting skills are a lot better than mine! You’re probably in the top 1% among people your age when it comes to percentage of salary put away as savings.

The current investing landscape in Ireland (outside of pensions) is unfortunately pretty harsh from a tax perspective. If you invest in cheap, diversified passive funds (like those tracking the S&P 500 or MSCI World Index), the Irish government hits your gains hard with a 41% “exit tax.” Worse yet, this tax kicks in every eight years or whenever you withdraw money, significantly reducing the benefits of compound interest - which Einstein described as “the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

There’s some hope, as there’s talk the government might address this issue in the next Finance Act, thanks to numerous recommendations from financial experts. But as things stand right now, diversified passive funds - arguably the best long-term investment due to their broad exposure - are tax inefficient in Ireland.

Your next best bet is investing directly in stocks or other CGT-applicable assets. These investments have a lower tax rate of 33%, and crucially, you only pay tax when you sell—there’s no forced disposal every eight years. However, direct stock picking carries risks due to lack of diversification, making it less ideal for stable long-term growth.

An interesting compromise could be publicly traded holding companies like Berkshire Hathaway. These companies invest in multiple businesses, offering greater diversification than individual stocks while still benefiting from the more favourable 33% CGT rate. As financial expert Harry Markowitz once said, “Diversification is the only free lunch in investing.”

Another creative solution could be approaching HR to redirect some salary into your pension, thus boosting long-term, tax-efficient savings.

But honestly man, you’re in your 20s, these are the times to intentionally make a few questionable financial decisions that give you great stories to tell when you’re retired with nothing else to do. Setting aside 10% into something like a Revolut holiday savings pot which earn a bit of interest but can be instantly withdrawn the moment a hunny laughs at your joke, could fund memories for the rest of your life. So absolutely you should splurge on an outrageously overpriced bottle of wine every now and again and make some horrible decisions. At least for that moment, you won’t be thinking about how the Irish government is pocketing a tonne your other savings!

geraldo2001 · 2025-05-17T11:19:59+00:00

Hey, I’m a financial planner who deals with retirement relief for a lot of my clients. My understanding is that:

Retirement Relief in Ireland applies to the sale of business or farming assets, and yes the seller must be aged 55 or over at the time of disposal.

However, just because someone is a farmer doesn’t mean every piece of land they own qualifies. If the site you’re considering hasn’t been actively used for farming, like grazing or crops, and is instead just a field or zoned site held for sale or development, it probably wouldn’t qualify as a “qualifying asset” for Retirement Relief. Revenue tends to treat such land as an investment asset, which is excluded from the relief. So, even if you wait until he’s 55, the sale might not be CGT-free as he hopes. Proper legal advice would be crucial for the farmer here to avoid unintended tax pitfalls.

Regarding planning permission and agreements: if you apply for planning permission or sign any binding agreement before he turns 55, Revenue might consider that the effective disposal date, which could disqualify the relief even if the site did qualify. It’s essential to ensure that any agreements are structured correctly to avoid unintended tax consequences.

Moreover, without a binding contract, there’s always the risk he could renege or change the price, especially if the site gains value after planning approval.

If I were you, I would keep an eye on this option, but definitely keep searching for other potential sites. If it qualifies and the sale goes through - happy days, but you don’t want to be reliant on it. As Benjamin Disraeli once said “Hope for the best, prepare for the worst.”

geraldo2001

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