Where should I invest?


So all going well I’ll be mortgage free in 5 years when I turn 40.

I’ve a public service job with the old (better) pension, which gives you half final salary at age of retirement if you have 40 years service.

I’m hoping to retire earlier, perhaps at 55. So this would mean 30/40ths of my pension but that should still be c. 30K a year, after allowing for some wage inflation. To me this is enough to live off so I’m not sure I need an AVC?

The problem with retiring at 55 is I cannot access my pension until 65 without incurring massive penalties. So I’d hope to leave it alone and live off savings for 10 years before I draw it down.

So between 40-55 I’ll have extra cash, which I can
a) save - zero interest but safe
b) invest - stock market? Don’t know anything about it!
c) BTL

For a BTL I could get maybe a 15 year mortgage. Rent after tax might pay the mortgage in full each month and BTL mortgage interest is now 100% deductible for tax.

Of course there’s the hassle of managing the property for 15 years but I could sell it at 55 for hopefully close to what I paid and use the proceeds so fund my retirement gap of 10 years to age 65.

Any thoughts or suggestions on alternatives are really appreciated.

And any good landlord website links?


Firstly an AVC PRSA will allow you to access it at 60.

All the rest is just my perspective. Read and copy at your own risk.

a) Cash. Expect zero or close to zero returns for the foreseeable future. It loses real value each and every year.

b) This last 20 years has been the worst in a century, but the world stock market has still given an average return of about 7% a year. This is despite two massive crashes during that time. If you saved a set amount every month over the last two decades and never looked at the value of the stock market until today, you would be smiling. Even the Japanese market, which has been a disaster, if investing in it for the last twenty years and reinvested the dividends along the way performed better than cash.

If you want to know more about this option, youtube index funds and Jack Bogle. An easy to read book is, A random walk down wall street.

c) BTL is moderately high risk with low return. Rental income is taxed at the marginal rate of income tax, so you pay 50% of it in tax. This isn’t the worst part of it. There is a real chance that you get a tenant from hell that costs you €50k by trashing the place and not paying the rent for 2 years. It may work out for you.

I’m sticking all my spare cash into a PRSA and option ‘b’.