Investment Advice 50K

Hi looking for bit of advice. Have 50k+ lying in credit union earning 3% p.a. No mortgage. Combined income of 60k+ p.a. Have regular saver 500 pm with Anglo. Husband will have State Pension. I have no pension. Have investigated this but keep putting it off cos don’t feel it is all it is cut out to be and keep hearing bout amount of money being wiped out of pension funds. It's too hard earned to lose. It's only tax deferral and some company drip feeding me MY money when I retire. Maybe problem is I don’t fully understand them. Anyway I feel the money we have could be working better for us. Any suggestions appreciated.

Do you have any other debts or savings/investments? What ages are you? Your husband might not want to depend on just the state pension (I presume you mean an SW pension?) to survive on as it's not that generous. Being put off pensions by transient market volatility doesn't really make sense especially if you would be invested in a pension for decades which should be more than enough time to ride out such volatility. Also you do get a tax deferral on pensions but you can also take up to 25% of the lump sum pension amount tax free at retirement. If I was you I'd get independent professional advice and reasses the pension option which you may be writing off soo rashly. Have you read the Savings & Investments key posts and in particular the AAM and IFSRA guides to savings & investments which give some useful background and food for thought?

Tks Clubman. No debts. Only other investment is 12,500 in Royal Liver earning practically nothing but it matures next year so I will leave it there til then. Have 13k in a pension fund (defined contribution) with Eagle Star from a previous employer which I cannot contribute further to I am told. I can only transfer to Retirement Bond. I am 41 my toyboy hubby is 40. Sorry to be unclear but I meant that he will have a generous An Post pension upon retirement. That is another reason why I have also held off setting up a pension for me as I feel we will be ok with two State Pensions and An Post pension. Any advice on how we could invest some of the 50k+ wisely.

susang said:

Have 13k in a pension fund (defined contribution) with Eagle Star from a previous employer which I cannot contribute further to I am told. I can only transfer to Retirement Bond.

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Or you could presumably leave it where it is or eventually transfer to another employer scheme when applicable? You should get advice on what's best here - for example you might get a better deal on charges and fund selection by switching to a buy out bond/retirement bond.

I am 41 my toyboy hubby is 40. Sorry to be unclear but I meant that he will have a generous An Post pension upon retirement. That is another reason why I have also held off setting up a pension for me as I feel we will be ok with two State Pensions and An Post pension. Any advice on how we could invest some of the 50k+ wisely.

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It's very difficult to make specific recommendations having only partial (albeit more detailed now) info about your overall situation.

I would recommend that you get independent, professional advice from somebody who can do a proper fact find and make recommendations suitable to your specific needs - e.g. a good authorised advisor or multi agency intermediary. In preparation for that at least read the links to which I referred earlier.

Totally second that recomendation. You really need good "independent" professional advice on all of the options available. A decision like this should not be made without a close examination of all of the options available. If you are paying top rate of tax it would be a poor decision to write off the pension option. Nowadays there are a number of different ways in which you can optimise your pension to your own individual circumstances and future requirements

Tks folks.Have contacted the Financial Regulator and they are going to send me a list of Independent Financial Advisors in my area & I will have a chat with them. Feel I need to rethink the pensions option alright. Read the AAM Guide to Savings and Investments - Excellent and v simple. Investing in stock exchange directly seems attractive but don't think I would be willing to invest more than 5k to start with. Would it still be worth my while.

Bear in mind that the AAM guide to savings & investments largely comprises Brendan's point of view with some counter views from others. Have you read IFSRA's guide for a more generic look at things?

Investing in stock exchange directly seems attractive but don't think I would be willing to invest more than 5k to start with. Would it still be worth my while.

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Again consider the previous advice re consulting a profesional first. Stock exchange can be either an investment or a speculation. If an investment you are talking medium to long term and €5K investment will not give you much of a return. If you are looking for quick and higher returns on this investment then you are in the area of speculation where you are taking higher levels of risks on individual stocks. You may achieve higher returns but without experience it would be a significant gamble IMHO.

if its TOO hard earned to lose, I would stay away from stock market, unless 30-40% drawdown is acceptable, there are better than 3% interest rates available in banks these days, at 3% you are losing 2% per year, with inflation of 5%.
With pension government will contribute 41% , so even if pension fund loses 41%(not likely) you would still breakeven.

If the potential dips of a pension are putting you off, the risks involved in investing in the stock market directly should be really scary!

Pension funds dip (usually) when the underlying funds they are invested in perform poorly. Given that a pension is spread across a large variety (depending on the exact fund you opt for) of stocks, by picking just a handful for you to invest in directly greatly increases the risk due to the lack of diversification. If a pension fund performs poorly then the risks for you when holding just a small number of shares are huge.

You also miss out on the tax incentive, so with a pension your fund would instantly start with a 41% gain.

I do agree that having the funds tied up and untouchable is a negative, but worth thinking about the future and no harm in starting a pension fund as early as possible to give the fund more time to rise in value [I'm in my early 20's and have begun a pension already (mainly to max out my employers contributions)].

Hi folks. Me again. After contacting a local financial business listed as one of the AAs on the Irish Financial Regulator's listing I was told they do not provide such a service. It appears to me it is impossible to get real idependent financial advice. Please any suggestions, recommendations. Thinking bout quinn life freeway acc. Anything else!!!!!

Did you just call one of the advisors on the list?

Yeah. Two listed for where I live. One I called, one I know too many employees. Still feel it is difficult to get totally independent advice (irrespective of previous replies) when AAs are tied to particular insurance companies. Surely there has to be an element of trust there with me that they will make recommendations for my betterment rather than to bump up sales of a particular policy. Can I ever be sure of that. Maybe I have major trust issues!!! Anyone recommend a good psychologist (only joking !!!!)

Happy Girl said:

Yeah. Two listed for where I live. One I called, one I know too many employees. Still feel it is difficult to get totally independent advice (irrespective of previous replies) when AAs are tied to particular insurance companies. Surely there has to be an element of trust there with me that they will make recommendations for my betterment rather than to bump up sales of a particular policy. Can I ever be sure of that. Maybe I have major trust issues!!! Anyone recommend a good psychologist (only joking !!!!)

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I agree that it is difficult to get totally independent advice. AAs get commission if you buy off off them. The most independent advice is your own. Shop around. For a start you might go and talk to your own bank. They always have a pension advicer there who will give you the low down of what they have available and what you will need to contribute to have a desired amount upon retirement. The required contributions certainly wake you up and get you moving. I took them up on their offer of a consulation but didn't touch them due to their high setup and high contribution costs (5%). They of course assured me they were the lowest in the business. I knew otherwise and went with Quinn Direct.

Also you had a point in regard to feeling pension funds loosing money. With a personal plan you can control the exact funds you buy into. You can buy high risk emerging market equitiy funds, lower risk European, medium risk Irish or mixed allocation funds. You can buy low risk bonds and even cash funds if you wish. Overall time the return of a diversified pension funds tends to sit circa 7%.

You would be far better saving into a pension fund than an SSIA type savings account unless you want to get at the money over the next 10 years.