SMP Financial
Efficent financial planning - Inheritance, Pensions, Investment - we've been helping people secure t
About SMP Financial
SMP Financial is a financial broker serving clients nationwide. We advise on -
• Pensions • Investments • Life Insurance • Financial Planning
SMP Financial Ltd is regulated by the Central Bank of Ireland
SMP urges business owners to act now as unlimited pension funding comes under threat.
The Irish Times reported on 19th May, 2024 that Revenue has expressed concerns to The Department of Finance regarding new pension rules that came into effect in January 2023 allowing unlimited funding of PRSA pension contracts.
When it comes to extracting cash from your business, contributing to a pension is extremely efficient. The current unlimited funding regime for PRSA's provides a unique, and possibly time limited, opportunity to do this at scale.
Key benefits
Companies can contribute an unlimited amount to a Company Director's PRSA Pensions allowing for money to be transfered from the Company's ownership to the Director without tax being paid.
On retirement, up to 25% of pension funds can be taken tax free.
Any income or growth generated within the pension are tax free. This can be maintained up to age 75.
Funds can be accessed from age 60 ordinarily or age 50 in certain circumstance.
The company can contribute to both an occupational pension and a PRSA for an employee so this scheme can be set up along side existing pension arrangements.
Pensions are extremely efficient long term personal tax planning vehicles. Where larger sums are concerned they should be considered as much as a tax planning tool as one to provide retirement income.
It is likely that if any change is made to the current regime it will be introduced in Budget '25. We are urging clients to consider their options now in order to lock in the advantages available under the current regime.
Please contact [email protected] or direct dial 01 5840127 to discuss.
Lessons from a lifetime in investment Eternal verities in investment and finance are often counterintuitive
If you are affected by any of the issues raised in this article... Call me!
Donal Milmo-Penny, Financial Planning at SMP Financial 086 2547879 [email protected]
Users of financial advisers have 60% more savings, survey finds Those who take financial advice are “substantially better off”, according to a recent survey by Brokers Ireland.
Should we be worried about stagflation?
Stagflation is a term used to describe when economic output stagnates and inflation rises simultaneously. It's a nasty thing first observed in the 1960's. Stagflation defied conventional theory that told us prices rise in times of growth and fall in times of contraction. Real world experience tells us however, that theory and reality seldom precisely mirror each other, especially when you account for human behaviour or the systems we contrive where policy has the ability to adjust binary outcomes.
Stagflation is most commonly associated with the period of the oil crisis in the 1970's. This in itself can be broken down into two separate events in '73 and '79 both triggered by war leading to producers cutting oil supply. This echoes uncomfortably today, though whilst relevent, today's circumstances are not directly correlated to that time, making a direct comparison overly simplistic.
Conventionally, stagflation is accompanied by high unemployment. Today, we have close on practical full employment in the developed world. The consumer is for the most part in good shape. Household balance sheets are not overly leveraged and there has been a significant build up of savings over the COVID period. The US leads the developed world in terms of its reliance on consumption with close on 70% of its economy being reliant on the consumer. A healthy consumer generally means a healthy economy. Though the consumer is a fickle beast, confidence can feed as much back into behaviour as hard and fast theory. When so much of your economy is dependent on this you need to be as adapt at reading the tea leaves as doing the math.
Is stagflation a concern today? Not immediately at least. Whilst the labour market remains buoyant and household balance sheets strong, there is no need to become overly concerned. Though this is a precious thing. Central Bankers' primary tool to deal with inflation are interest rates and they are starting to pull the lever fairly hard. The median equivalised disposable income of a UK household is £29,900, that's what Joe Punter puts in his pocket after paying his taxes. From that, bills, mortgage, food and travel are paid as are holidays, clothing, pints, pocket money and so forth. Leave the science for a second and read the tea leaves. The price of everything Joe buys seems to be going up; his car is costing 1/3 more to fill then a year ago, food is more expensive and all the chatter on the radio is about cost of living increases. He's going to start feeling cautious. Now crunch in the effect of policy action. When the Central Bank raises rates to counteract inflation, Joe's mortgage goes up. The net result is he not only a little poorer but he also feels that way, so behaves differently, that's sentiment. Joe's an important bloke when so much of your economy is based on consumption. If he gives up support and you start inadvertently hammering him by increasing his mortgage rate you've got a problem. If we kill consumption in the current circumstances we kill the golden goose and stagflation may yet raise it's ugly head.
For investors today, the greater concerns should be positioning their portfolios to protect against inflation and, in light of the recent correction, to be cognisant of valuations. Some markets are begining to look inexpensive though others remain above their historical mean. The price you pay for assets, best measured by a cyclically adjusted price earnings ratio, is perhaps the greatest determinant of long term outcomes. That's boring but true... and has little to do with stagflation.
Retiring soon?
Have you thought about your pension?
Retirement will give you plenty to think about whether you are looking forward to slowing down or you are planning a new career. Regardless of where life has taken you so far, you will need to consider your pension as you approach retirement.
Depending on what you have done through your working life, you may have pension benefits from previous employments along side that from your existing. For more information on benefits from previous employments visit www.smpfinancial.com/retainedbenefits
You will also have entitlements to a state contributory pension. For information on your entitlements and how to claim your state contributory pension visit www.smpfinancial.com/statepension
With regards to retiring your private pension you will need to consider whether this should be placed in an ARF or used to purchase an annuity. You may also have to option of deferring drawing your pension or conversely taking a considerable portion of it as tax free cash. If you would like to talk about your pension please drop us a Messenger or visit our website for further information.
Approved Retirement Fund information:
www.smpfinancial.com/arf
Annuity information: www.smpfinancial.com/annuity
EIIS 2021 - all you need to know
Donal Milmo-Penny talks with Elliott Griffin and Seamus O'Donnchadha of BVP who are we have partnered with for 2021.
The deadline for subscription is December 31st. Please message us directly for more information or to subscribe.
https://youtu.be/uAnU7ytKRyc
EIIS Investing 2021 Donal Milmo-Penny from SMP Financial in conversation with Elliott Griffin and Seamus O'Donnachadha of BVP.
Donal Milmo-Penny on valuations, they are uncomfortably high. So how should you position your portfolio?
With tax year end looming it's time to address your pension contribution in respect of 2019 earnings.
Remember if you are a professional and you don't avail of relief in a given year it's gone for ever. Donal Milmo-Penny provides a quick overview.
Donal Milmo-Penny reacts to Budget 2021. It's modern but perhaps a taste soft. Looking forward to seeing what crops up in the Finance Bill.
Donal Milmo-Penny believes this is a time for investors to be pragmatic.
Donal Milmo-Penny answers your questions on retirement age.
Taking financial advice at retirement can have a significent positive impact on your finances in the future. Donal Milmo-Penny from SMP Financial asked have you had access to an adviser during the crisis and invites questions he will answer in a video next week.
It's day 1 of eased COVID19 restrictions. Despite our collective success in containing the virus, many any business owners will be relieved this day has finally come. Donal Milmo-Penny from SMP Financial comments and introduces a short series we will present this week on varying aspects of redundancy from a financial planning perspective. Stay well.
Unfortunately we are now seeing a first wave of redundancies on foot of the COVID19 crisis. Donal Milmo-Penny from SMP Financial discusses what to consider particularly in relation to pensions if you are affected.
For general information about pensions on leaving service click on:
https://www.smpfinancial.com/leaving-service-options
Should you be rushing into gold right now? SMP Financial's Donal Milmo-Penny comments.
What happened to stock markets after the 1929 Crash? Is that experience relevant today? Donal Milmo-Penny from SMP Financial provides brief comment.
Donal Milmo-Penny from SMP Financial explains perhaps the best indicator of where the real economy is today.
Donal Milmo-Penny from SMP Financial asks are you comparing apples with apples if you're looking at oil prices.
SMP's Donal Milmo-Penny asks should you be concerned by the extraordinary moves we have seen recently in markets.
SMP's Donal Milmo-Penny comments on COVID19, oil prices and what this says about the broader economy.
Should you go to cash now?
SMP's Donal Milmo-Penny comments on recent market action and how this should affect your financial planning.
Helicopter money is being dropped in Ireland - SMP's Donal Milmo-Penny believes the government's policy response to the current crisis is both powerful and we'll targeted.
Donal Milmo-Penny gives a brief comment from the coal face.
If you are worried about your pension, investments or your financial planning in general and how the current turmoil might be affecting it, we are offering an informal 15 minute phone call to discuss. This is an open agenda call and free of charge open to clients and non clients alike. Please email [email protected] to book a time.
Germany hides the awkward truth about the euro
Interesting perspective. The economic logic proffered sound, the realpolitik is a different matter.
https://www.ft.com/content/7a43c4ae-d496-11e9-8367-807ebd53ab77
ft.com The benefits of integration carry a price tag. German voters have never been required to understand this bargain
Beware the inverted yield curve!!
https://www.facebook.com/8860325749/posts/10157131315255750/
The US yield curve inverted last week — a classic omen of a coming recession over the years. Now concerns are stirring that the country’s post-crisis economic expansion is heading for a grisly end. Here’s what this means for the health of the global economy: https://on.ft.com/2Fztakn
A second Brexit referendum is now essential
The FT's Martin Wolfe comments sensibly on Brexit
https://www.ft.com/content/d69fe31e-38f0-11e9-b856-5404d3811663
ft.com If democracy means anything, it means a country’s right to change its mind
Donal Milmo-Penny on positioning your portfolio late in the market cycle.
A 100-year-old retired airline pilot with $5 million in the bank used a timeless tip to build his fortune
A classic story on the power of compound interest. There's no magic in the maths but the real world effect is powerful.
https://www.businessinsider.com/orville-rogers-retirement-advice-saving-early-2018-10?utm_content=buffer981cf&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
businessinsider.com Orville Rogers is enjoying 40 years of retirement with a nest egg of $5 million because he started saving early.
Is the next financial crisis already brewing?
Here's a deeply pessimistic piece from the FT warning of the next "crisis".
Whether you buy the central thesis proffered, it is important to understand the changing dynamics of inflation and interest rates. These factors will be of critical importance to investment success in the coming years.
www.smpfinancial.com
https://www.ft.com/content/58d1ce9c-b5a2-11e8-bbc3-ccd7de085ffe
ft.com Markets will face much tougher conditions as the global economy slows
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About SMP Financial
SMP Financial is an independent financial advisory brokerage based in Dublin.
We can help you with:
• Financial Advice • Pensions • Investments • Personal & Business Protection
SMP Financial Ltd is regulated by the Central Bank of Ireland
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