Well with an i5, yes you are severely limited. I would say wait until the TR-2 comes out and forces Intel to change their price points. If you want to upgrade, it would be a good opportunity for you make some changes, either by going AMD, or by staying in the Intel camp. Know that if you go Ryzen, rumour is that Ryzen 2 will have up to 16 cores, or Threadripper a max of 32 (for now) and if you go Intel they are segmenting the market even more and are doing away with hyperthreading for i7's altogether with the new line of chips. Ben is of course correct though that x265 really starts to shine at slower.
It's really a tough call on what to upgrade to as your machine is perfectly fine for everything else except for encoding! Encoders always wish they had more power haha