Investing in pension fund or something else for long term?

[embroiderygirl06]

I am 34 years old living in Ireland. I am paying off a mortgage and I have 65k in saving atm.
I was thinking to invest but I also would like to pay off some mortgage debt in 3 years time when my fix rate comes to an end.
So I either invest some of this money for the 3 years period (I guess that is too volatile especially when you are not a pro in investing) or I just invest 10-15 k long term.
What would you suggest?
Investing in pension has some tax relief (40%) so if I do an additional voluntary contribution of 10 k I would just put out of pocket 6 K
And that is invested in the corporative fund with high risk and orientative
4.5% gross p.a (not granted) How safe they are and how much they normally grow?
If I take the long term option would you put that money in the pension fund (considering the tax relief) or something else? I ve been reading a lot but still not able to decide.
TIA

 

[kjs000]

@embroiderygirl06 Only invest money you are willing to lose.

The last thing you want to to be forced to realise losses because your 3 year time horizon is over just when you are in the red.

You can get low risk returns from saving accounts (which are currently enjoying higher than usual yields) and by directly buying investment grade bonds, both options are valid for a 3 year period.

 

[embroiderygirl06]

@kjs000 Thanks! Which saving account would you recommend?
In that case would you put the spare 10 k into pension fund and benefit from the tax relief and the eventual 4.5% p.a long term?

 

[kjs000]

@embroiderygirl06 I personally went down the bond path + my broker gives interest on the account's cash balance.

I'm not a fan of pension schemes, at the end of the day they are investment funds wrapped in a fancy abstraction layer that provides them (IMO) an unjustified prestige.

But that's not me giving advice, just a rant.

You do you.

 

[embroiderygirl06]

@kjs000 Thanks again. I Will do my homework and check the different bond options. I see there are a few discussions here.
Just out of curiosity which broker are you using and what bonds did you invest in?
Thanks again

 

[kjs000]

@embroiderygirl06 Using Scalable Capital, purchased bonds from Goldman Sachs.

But for your purposes I would actually suggest looking into Trade Republik, they have more bonds on sale & higher interest on cash.

I opted for SC because unlike TR they offer a fixed trading fee.

 

[dub_97]

@embroiderygirl06 What the heck is corporative fund. You should invest in world index for your retirement.

There are ETFs (XEON.DE) that tracks ecb interest rate. I assume there is version of that for you in GBP. I would put money there until you have new rate for mortgage.

 

[embroiderygirl06]

@dub_97 Why gbp? Ireland is euro. Where I start from? Sorry I am quite new to this and not really knowledgeable so any help is appreciate it

 

[dub_97]

@embroiderygirl06 Sorry for my ignorance.

Now you need broker. IBKR is generally recommended broker but I understand you are looking for conservative investment and I am not sure you would be ok to send 65K to some new webpage so some local broker might be better.

Also you need to understand your tax situation. Im not familiar with Ireland tax situation but I know that in Germany it is better to have local broker since they are somehow dealing with taxes for you.

Once you have broker you are all set. Transfer money to broker, buy XEON, that is following ECB interest rate and watch your money grow a little every day.