Neither. You should probably use them to clear the €28k car loan which is presumably much more expensive than the mortgage.
- Should I use my savings to reduce the remaining balance of the mortgage or should I retain my savings for a rainy day?
If early retirement is an aspiration then bulking up the pension is almost certainly a necessity.
- The money that is currently going into the savings should I now divert these into my AVC (had previously paid into the AVC but stopped the payments in 2012)
- The longer term plan is to retire at 60-62 if possible so will need sufficient income until the state pension kicks in.
Impossible to say without some info about the work option - in particular the charges and the investment options.
- Work facilitate (not sure that is the correct term) an AVC but could better value be got from elsewhere?
Public sector pension and AVC worth 17k (not currently paying in)
- The longer term plan is to retire at 60-62 if possible so will need sufficient income until the state pension kicks in.
- Work facilitate (not sure that is the correct term) an AVC but could better value be got from elsewhere?
This is not fully clear to me. Are the kids in paid employment by your spouse? Or is he putting cash into a college fund? Or both?The older children are employed by my husbands business with 2k per month going into a college fund - 14k currently in this account with eldest child likely to attend college in in Sept
Rent sounds low given the value - think about increasing it where possible if rules allow.Other property: Rental property worth 300k with a 74k mortgage remaining. Rental income 1350 a month final payment 2027.
Thanks for your response.Neither. You should probably use them to clear the €28k car loan which is presumably much more expensive than the mortgage.
If early retirement is an aspiration then bulking up the pension is almost certainly a necessity.
Impossible to say without some info about the work option - in particular the charges and the investment options.
At 62 I will have 35 years service and I'm post 2004.What length service do you expect to have at 60-62? I am assuming you are Class A PRSI. What scheme are you in - pre April 2004, post April 2004 or Single Scheme?
As regards "better value" you can shop around Brokers for charges on a PRSA-AVC, or choose an "execution only" PRSA-AVC (eg, https://www.labrokers.ie/about-us-la-brokers/). There are some brokers on this forum who might advise further, and also users who have gone the PRSA-AVC route. A PRSA-AVC is essentially the same as a standard AVC except that contributions are paid by direct debit rather than through salary deduction, and you then arrange with Revenue for the relevant tax credit to be coded in for salary purposes. The tax relief is the same.
This is obviously not a good way for a married couple and family to run a household's finances.Thanks for your response.
In respect of the car loan - spouse is a spender and I'm the saver - we operate somewhat independently from a financial point of view. Payments will be made on the car but if the car loan was paid off - spouse would find something else to spend that money on!!
What did they include in the quote if they didn't state the charges?I got a quote for the AVC but do not see any details of fees so will clarify this.
Thanks for responding.This is not fully clear to me. Are the kids in paid employment by your spouse? Or is he putting cash into a college fund? Or both?
I don’t know the SUSI rules at all but you should probably be aware of them if not already as you will have a lot of third-level cost very soon.
Rent sounds low given the value - think about increasing it where possible if rules allow.
Fully aware of this but do my best to keep things in orderThis is obviously not a good way for a married couple and family to run a household's finances.
What did they include in the quote if they didn't state the charges?
Annual gross income from employment: 53k
At 62 I will have 35 years service and I'm post 2004.
I have no idea what this is but......Spoke to an 'advisor' (selling their companies AVC) and the the application refers to a Passive IRIS Retirement Fund
.....this sounds poor.Went through quote again and found fees: .75% AMC, gross allocation 69% year 1 and 95% year 2 onwards.
Those charges are terrible.Fully aware of this but do my best to keep things in order
Went through quote again and found fees: .75% AMC, gross allocation 69% year 1 and 95% year 2 onwards.
Went through quote again and found fees: .75% AMC, gross allocation 69% year 1 and 95% year 2 onwards.
Thanks so much Gerard this explains a lot you have been more than helpful.This has to stop.
These contracts were the construct of actuaries 20/25 years ago and the companies that still have them available are complicit in the maximisation of commission. There wasn't much choice/competition in pricing back then.
They are about the funding of the salary/lifestyle/retirement of the persons who designed and sell the products. No mention of the Annual Management Charge so it's likely that that may be greater than 1% also.
I'm in this execution only space for 15+ years and the three most quoted general reasons that advisers give to potential clients as to why they shouldn't do an AVC PRSA on an execution only basis are i) 'If it sounds too good to be true, it probably is' (in relation to 100% allocation and 1% AMC) - Doubt ii) 'But you might make a mistake choosing a fund' (because you *need* the advisor to figure this out) Fear & iii) 'But you won't be able to do it by salary deduction and that's very handy' - Inconvenience/Time.
i) It is true
ii) There are risk profilers available that help you figure this out &
iii) If you do decide to do this execution only then attached are (slightly dated) instructions on how to claim the tax relief via Revenue 'My Account'.
Fair enough, you may need other advice with how this transaction fits in with the bigger picture but a lot of folk know they just want to buy the product. It's not a suitable service for everyone.
You might be better off just doing a single contribution for 2022 now and either add to that in future years or, you may be able to purchase a lower cost PRSA AVC later in the year when pricing has been clarified by all product providers.
Gerard
www.prsa.ie
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