€50 p/w saved through your payroll into an AVC will provide you with a retirement fund of:
Years to Retirement / AVC Fund at retirement*
5 years - €11,722
10 years - €24,960
15 years - €40,952
20 years - €58,805
25 years - €78,630
30 years - €100,710
€50 per week saved into your AVC
costs
:
€30 per week from net pay (40% tax payer)
€40 per week from net pay (20% tax payer
*Assumes 3% p/a growth. Unit prices can fall as well as rise
5% of each contribution in year 1 is horrendous.
I misread the post and thought that it was "only" in year one that 5% of each contribution was taken. So it's much much worse than I thought!It's worse than that. The 5% charge is from year 2 onwards. In year 1, it seems that a bigger percentage gets taken out, but it doesn't say in the posts above what that percentage is. I can see why it might take between 10 and 15 years just to break even if a substantial chunk is being taken in the first year.
Are you public service? The OP will have the PS pension, AVCs are on top of that. I agree he should do something but this sounds like a poor dealHi Steve,
I am not going to try to offer any advice re products. But I started thinking about pensions and AVCs when I was in my early 30's and almost signed up a few times but decided to put it off for a while - I was in my early 50's when I picked up on it again and did something about it. At that stage I was scratching my head wondering why I hadn't done something before then.
If I could rewind the clock I would definitely go an do something earlier.
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