Lump Sum vs Regular Investment
If you have a lump sum, is it better to invest it all at once, or spread it out over months? This calculator runs both scenarios at your expected return so you can see the gap directly. (TL;DR: at positive expected returns, lump sum almost always wins — but DCA reduces timing risk.)
How is this calculated?
We project two paths over the same horizon. Path 1: the entire amount invested as a lump sum at month zero, compounding for the full period. Path 2: the same total spread evenly across the period as monthly contributions, each contribution compounding from the month it’s made. Both use monthly compounding at your stated annual return.
Frequently Asked Questions
Why does lump-sum investing usually win?
Markets generally rise more often than they fall. Investing the full amount upfront means more money is in the market for more time, so it benefits from compound growth on the full balance. Drip-feeding (DCA) leaves part of the money in cash, missing out on growth.
When should I drip-feed instead of investing a lump sum?
Drip-feeding (Dollar-Cost Averaging) makes sense when: (1) you're nervous about a market crash and the psychological cost of seeing a loss is real; (2) markets are at all-time highs and you want to reduce timing risk; (3) you genuinely don't have a lump sum and are saving from regular income. The 'cost' of DCA is reduced expected return.
How does this apply to Irish pension contributions?
Pension contributions are typically monthly (drip-fed) because they come out of payroll. If you have a lump sum to add, AVCs (Additional Voluntary Contributions) before tax-year end let you invest a lump sum into your pension and claim full tax relief — usually a strong move for higher-rate (40%) taxpayers.
What return assumption should I use?
For diversified equity funds (e.g. global index trackers), long-run real returns have been around 4%–6% per year after fees and inflation. Be honest about volatility: the same fund that returns 6% on average can be down 30% in a single year. Use a conservative rate for plans you'll need to rely on.
Are gains taxed in Ireland?
Yes. Investment funds are typically taxed under the gross-roll-up regime: 41% exit tax on gains, due every 8 years (deemed disposal) and on actual disposal. Direct shares are subject to CGT at 33% on gains above the €1,270 annual exemption. Pensions grow tax-free internally; tax is paid on drawdown. Factor expected tax into your return assumption.
Last updated: May 2026 · Rates sourced from Revenue