Hi folks, looking for some adcice. I am a 38 year old PS employee in the PS 14 years now, so on the pre 2013 pension scheme.
My house is paid off and I've no debts so I've extra cash now that I want to put to good use. I plan to retire at 60, which would leave me with 35/40 years service, so I believe there is scope to pay into an PRSA AVC to cover the 5/40 year shortfall shortfall on my lump sum at retirement. This won't be that big a sum and only a small enough AVC contribution over the years would cover that.
Am I right in thinking its still a good idea to pay more into my AVC if I can, as the money I would be putting in would be taxed at 40% anyway, and if I pay it into my AVC I get the benefit of that compounding each year at 5-10%. Then when I retire I should be paying the lower tax band when withdrawing it through an ARF?
Considering my options and from my research this seems a reasonable approach?
My house is paid off and I've no debts so I've extra cash now that I want to put to good use. I plan to retire at 60, which would leave me with 35/40 years service, so I believe there is scope to pay into an PRSA AVC to cover the 5/40 year shortfall shortfall on my lump sum at retirement. This won't be that big a sum and only a small enough AVC contribution over the years would cover that.
Am I right in thinking its still a good idea to pay more into my AVC if I can, as the money I would be putting in would be taxed at 40% anyway, and if I pay it into my AVC I get the benefit of that compounding each year at 5-10%. Then when I retire I should be paying the lower tax band when withdrawing it through an ARF?
Considering my options and from my research this seems a reasonable approach?