Thanks RM.
Is installing PS and LR on the same external SSD doable and if it is would it speed those apps up as well?
Sorry for the delay in responding, had trouble with the password reset.
1) I'm running a 480GB SSD in my 2012 MBP (non-retina version) with PS and LR installed, so shouldn't be an issue
2) Your 2012 iMac has USB 3.0 and Thunderbolt, so external transfer speeds should be decent
3) I've booted and run off an external drive many times, no problems there
4) Still can't find the article I read, so can't personally vouch for the speed impact of running off a external SSD, never really tried that
5) FWIW, OWC has a turnkey upgrade program for your model of iMac if you wanted to swap out your internal drive for an SSD
Hope any of that is helpful/useful