Mula, Do you have a vested interest that we should know about?
Just to make it clear - I do intend to stay for life, 65 anyway. Also if it helps, I am married with one child and one on the way!
Ill take that as a "maybe" you have a vested interest.i'll send you the bill
regardless of which option you go for you should consider using the avc to fund for your childs education given that you will be retiring about by the time college comes around far better then putting the allowance into the post office etc imho
Ill take that as a "maybe" you have a vested interest.
take it any way you like
Using a product designed for one purpose (funding your retirement) for another (funding children's education) may not be a good idea.
why? if your children are going to college when you retire then why not especially if your gonna go from the high rate to the low rate of tax in retirement not to mention avoiding DIRT/cgt etc. theres no legislation that says you cant fund this way
read and understood no i have no vested interestMula - You need to check out . This is not an 'optional feature' - this is mandatory.
nsp is paid out at a fixed amount whereas you control how much you draw out from your avc/arf in order to meet college expenses etcI agree with Mula on one point - there is nothing wrong with using an AVC product to fund college fees, if everything else falls into place. However, Mula has failed to explain why he/she believes AVCs would be better than Notional Purchase in this case.
Yes 16.2 will give me the 40 years! It is a % of my gross wage. Maybe I will have to look again at AVC's. The calculation I got from them was about on par (given market performance of course) with the original €77, so I guess it is going to look a whole lot attractive now!! Does anyone now which AVC provider provides the best rates as far as commission charges are concerned, I assume I can use anyone, and not just the one recommended by my HR department “Personal and Corporate”?
Just for the record, the planned increase in rates was flagged up on AAM some months back.well just to throw a spanner in the works, I just received this from my Personnel office this morning. Remeber on my first post I said I heard the rates were going up!
The revised rates will apply in any case where contributions commence on or after 11th December, 2006. It is only purchase agreements already entered into for which contributions have already commenced or commence before that date that will not be affected by the revised rates in the circular.
Unfortunately, because your contributions would not commence until March, 2007, the revised contribution rates will have to be applied to you.
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...Sat down and cranked out a number of scenarios Whatever way I cut the figures, if I live to any sort of average age at all it's a good deal (even without the huge benefit of the salary-linked spouse's pension).
It is very difficult to judge the public sector notional service scheme against an AVC scheme because there are so many areas of difference. Here are just a few to consider:
1) If you're on an incremental scale, the earlier you start buying notional service by regular contribution the cheaper it is because you pay a fixed %age of salary and will get the benefit of the extra increments and any additional allowances to which you become entitled. This is a significant benefit of notional service over AVC - any significant salary increases late in your career will tend to make an AVC scheme look severely underfunded.
2) Future public service inflation-adjusted pay increases are impossible to predict but if you extrapolate the last 10 years' figures the picture looks bleak for an AVC scheme trying to keep up with notional service.
3) A state guarantee of benefit versus the volatility of equity and money markets aids restful sleep.
4) No commission, bid-offer spreads or hungry salesmen bothering you with the state scheme.
5) AVCs probably win on flexibility i.e. if you take a career break your notional service contract is interrupted and you'd have to take a new one out on resumption of employment at whatever contribution rate and terms and conditions would then apply - this was not something I looked at or factored into the considerations since I never expect to be in a position to take a career break.
6) AVCs do give you a big lump of capital to pass on to the chosen ones if you don't go down the annuity route and your ARF performs well enough in your retirement to avoid significant capital drawdown.