Start AVC's? + What to do with savings?

T

toby2111

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Messages
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Personal details

Age: 49
Spouse’s/Partner's age: 45

Number and age of children: 2 children,aged 11 and 9


Income and expenditure
Annual gross income from employment or profession:81000
Annual gross income of spouse:32000

Monthly take-home pay=€3460

Type of employment: Primary school teacher




Summary of Assets and Liabilities
Family home worth €400k with a €200k mortgage
Teachers pension
Company shares : n/a
Savings of 25k in prize bonds.
Credit union,€3000. Saving €165 a week into this.
PTSB savings a/c of €6885 paying 2.5%. Transfering 1k a month(max allowed)from Credit union into this account


Family home mortgage information
Lender=PTSB
Interest rate=2.8%
Type of interest rate: Fixed
If fixed, what is the term remaining of the fixed rate=Expires September 2027

Remaining term: September 2044
Monthly repayment: €1047

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month? Yes


Other savings and investments:

Do you have a pension scheme? Yes. Public sector,teachers pension scheme

Do you own any investment or other property? No

Other information which might be relevant

Life insurance: Irish life
Salary protection with Cornmarket


What specific question do you have or what issues are of concern to you?
2 questions-
AVC question..I'm 50 later this year,thinking of retiring at 60 but I'll be just under 3 years short of service then(I'll have about 37.3 years done by 60). Roughly how much AVC's per month would I need to start putting away to bridge that gap?
Also,if I decided to keep teaching until 63,therefore get full teaching pension, and was paying into AVC's,would I still be able to access the AVC fund? Is there a limit of what I can access?
I've read a bit about notional service but not sure if this suits me as if I sign up for that,I think I'll have to go at 60...don't know of it offers flexibility which I may need if kids are in college etc.

Secondly, what's the best thing to do with my savings? I know prize bonds are not great but I like the fact that I can access them fairly quickly if I need them. I know nothing about investing.
 
Last edited:
toby2111 said:
Annual gross income from employment or profession:81000
Annual gross income of spouse:32000

Monthly take-home pay=€3460

Type of employment: Primary school teacher
Click to expand...

Not sure that those figures make sense? A salary of €81,000 and an effective tax rate of 50% as a primary school teacher?
 
I don't know whether it's better to max the AVCs or buy back years.

But if you have surplus savings, you should probably just use them to reduce your mortgage.

For example, you are paying 2.8% interest and earning 2.5% less DIRT.

It's a big enough premium to be paying to have the cash available.

ptsb puts overpayments into a credit account so that if you need cash later, you can stop paying your mortgage until you use up the amount in credit.
Brendan
 
Brendan Burgess said:
I don't know whether it's better to max the AVCs or buy back years.

But if you have surplus savings, you should probably just use them to reduce your mortgage.

For example, you are paying 2.8% interest and earning 2.5% less DIRT.

It's a big enough premium to be paying to have the cash available.

ptsb puts overpayments into a credit account so that if you need cash later, you can stop paying your mortgage until you use up the amount in credit.
Brendan
Click to expand...
Thanks Brendan. If I was to sign up to notional service and buy back years,do I have to go at 60 then? Are AVC's a more flexible option? Plus I read on a previous thread that you have to live into your 80's for notional service to represent any value...
I will certainly look into reducing my mortgage though. I have 20 more years of it to go,I was going to use some of my lump sum at retirement to pay off the balance (think it will be about 60k or so) and clear it.
 
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