Moneymakeover Investment Guidance

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Oscar16

New Member
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Personal details

Your age: 69
Your spouse's age: 81


Number and age of children: 2 Adult Children who do not need finiancial support

Both Retired - Husband Retired Secondary Teacher
Me - Retired Manager in Corporate company

Income and expenditure
Income
Husbands Teacher Pension €41,000 per year gross
My Total pension : State €13,500 gross per year plus €8,500 net from Irish Life pension

Expenditure
Medical Insurance €2,500 each per year
Monthly Living Expenses €1,500 per month (includes heating and electricity)


In general are you:
(a) spending more than you earn, or
(b) saving?
Saving

Summary of Assets and Liabilities
Family home value: €950,000
Mortgage on family home: No Mortgage
Net equity: €950,000(house)


Total net assets:


Family home mortgage information NA

Other borrowings – car loans/personal loans etc
1. No borrowings

Do you pay off your full credit card balance each month? YES
If not, what is the balance on your credit card? NA

Pension information

Husband Teacher pension €41,000 per year

My Pension: Irish Life Defined Benefit Contribution (1) Current Value of Plan Name Complete Solutions ARF (converted) €80,000 (2) Plan Name Complete Solutions - ARF €179,131.75


Buy to let properties - NA
Value:
Rental income per year:
Rough annual expenses other than mortgage interest :
Lender
Interest rate
If fixed, what is the term remaining of the fixed rate?

Other savings and investments:
Husband; €15,000 Credit Union plus bank balance of €10,500
Me :- AIB Savings €275,000 : Zurich Prisma €50,650: ETFs €14,000: Current Account €15,000

Other information which might be relevant
Medical expenses : €100 pm


What specific question do you have or what issues are of concern to you?
Need Investment guidance
I invested €50,000 in Zuich Prisma 5 in May 2021 via a broker and I was able to withdraw €7,000 duirng 2024 (€2,000 in March & €5,000 in Dec) while protecting the principle amount i.e the €50,000 and I like the fact that the gains are taxed so I don't have to deal with submitting revenue returns etc. Not interested in adding to ETFs due the the tax effort, prefer when investment provider deducts even though its more expensive.
I have €270,000 sitting in a bank account gaining very little interest, my question is should I invest this also in Prisma 5 or other similar fund? I want my money to work for me with my main aim being to protect the principle and when the market is favourable withdraw the gain and leave investments alone when market is volatile and use the gain for holidays etc. I don't need access to this money for day to day living. Also the Zurich European Equity Fund is currently preformng well, should i consider this fund?
Also the broker I'm with charges are 1.25% and Zurich have advised that they would give me a cheaper rate of 0.80% if i dealt with them directly, which seems to make sense. Would love to hear your thoughts.
 
Oscar16 said:
my main aim being to protect the principle and when the market is favourable withdraw the gain and leave investments alone when market is volatile and use the gain for holidays etc.
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Assuming you’ll be entitled to a proportion of your husband’s pension should you outlive him, then spend your hard-saved money on making memories now…. you could be waiting a decade or more for your ideal circumstances for withdrawal to occur (a la 2000’s!). Life’s too short, go enjoy yourselves now!
 
What fund did the broker recommend?

What fund did Zurich Life recommend?

Do both pricing options include covering the cost of the Government Levy ie. are you going to get 101% allocation on your premium?

Your only other option to reduce the AMC further is to do it on an execution only basis - you won't receive investment/fund advice.
 
I'm dealing directly with Zurich (in the process of closing Broker account where the €50,000 Prisma 5 Plan isdue to high charges of 1.25%) and they have recommended three funds (1) Eurozone Equity Fund (2) 5*5 Global and (3) Prisma 5. Price includes Gov Levy and 101% allocation. There charge is 0.78%.

Not sure what you mean my reducting AMC further and do it on an exection only basis. Do you mean reduce the ARF (converted) €80,000?

Thanks
 
Interesting you're getting a 0.8% AMC from Zurich.

Is there a minimum monthly premium etc attached to this?

The best I can get from them in a non PRSA and just an investment product is 1%.

Is there a 101% allocation for this too?

Or do you have to pay the government levy yourself?
 
Thanks @ClubMan I am actually looking for a regular premium product rather than just lump sum but I guess I could encash the existing zurich policy to date and move the arising lump sum to a new policy via bond and continue regular premiums with the 1% policy. Seems crazy bureauracy/frition to literally keep the same zurich fund products though. Zurich should really be making it simpler imo
 
Oscar16 said:
I'm dealing directly with Zurich (in the process of closing Broker account where the €50,000 Prisma 5 Plan isdue to high charges of 1.25%)
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Warning: If you propose to take out this policy in complete or partial replacement of an existing policy, please take special care to satisfy yourself that this policy meets your needs. In particular, please make sure that you are aware of the financial consequences of replacing your existing policy. If you are in doubt about this, please contact your insurer or Financial Advisor.

What advice did you actually get on this? Was it verbal or written? Specifically interested in the converstation about the taxation and consolidating any losses/gains by moving from one contract to another. Was that mentioned? Not just, 'Here's a lower AMC contract. It's obviously better.'

I'm going to assume that there are no exit charges on this 2021 policy.

messyleo said:
but I guess I could encash the existing zurich policy to date and move the arising lump sum to a new policy via bond and continue regular premiums with the 1% policy.
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Same applies here. Get advice on whether the lure of a lower AMC [on these specific savings/investment products] is actually worth it. If you have all the information then you can make an informed decision. Fair enough if you have all of that and decide - 'To hell with the taxation I fancy the lower AMC because (insert reasons for changing).

messyleo said:
Seems crazy bureauracy/frition to literally keep the same zurich fund products though. Zurich should really be making it simpler imo
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What do you think they could/should do?
 
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GSheehy - the €50,000 element of the new Policy is the same as what I had with broker i.e. €50,000 in Prisma 5, there was no exit charge as I agreed with the broker to close policy on a certian day for the amount showing on my account and the full balance including profit is being transferred to my bank account. I will then transfer €50,000 directly to Zurich and they will set up the new Prisma 5 policy.
Zurich did say however, for the Prisma 5 new policy they would only allow 100% allocation instead of 101% as I already got 101% allocation when the €50,000 was set up with broker.

Regarding the other two new policies ((1) European Equity Fund and (2) 5 Star 5 Global) I have had several calls with a Zurich financial planner where I made clear my goals and we went through in detail a number of various funds they have on offer to find the policies which were best suited to my needs - exact same process I went through with broker when i set up the Prisma 5 policy with them.

Zurich are in the process of sending presentations detailing the level of diversation on each of the polices and other relevant information. I am clear on the tax element on any profits is at 41%. I will get 101% allocation for each of the new policies and I can switch funds up to 4 times a year for free and I can also access funds anytime with no charge.

Let me know if Im missing anything and many thanks for your feedback/advise, its much appreciated.
 
Oscar16 said:
I am clear on the tax element on any profits is at 41%
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This is levied every 8 years under deemed disposal taxation and at encashment. But this may change:

Life Assurance Exit Tax (LAET) - Changes?

Would be helpful to all readers of the forum if you could refrain from mixing in ETF Exit Tax comments/opinions in this post. There's an entire sub for ETFs and another post on what changes are likely to be seen on those following the funds review. They're different products so best to have as...
www.askaboutmoney.com
 
GSheehy said:
What do you think they could/should do?
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Ideally facilitate closure of one policy and immediate reopening of the other, transferring across all the same paperwork etc. without needing to close one policy and start the paperwork process which may take a couple of weeks before you can start the new policy. I think there should be a smoother internal process for closing and opening a new one.
 
messyleo said:
. I think there should be a smoother internal process for closing and opening a new one.
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They don't want to do it.

To close one and open another, you are ending one life assurance contract and entering another. There are regulations to be followed for each of those transactions (exit tax and 1% left are the must visible to punters). These transactions also incur termination and acquisition costs for Zurich which then need to be paid for from the charges they make. If you stay on the original contract, they don't have those costs. If the new contract has lower charges, they'd be even worse off if you moved. Theres just no reason for them to do what you suggest.
 
Fortune said:
Theres just no reason for them to do what you suggest.
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I do understand that, but they may lose the business altogether if I close it and move to Standard Life instead of staying with Zurich. A policy worth a few 100k (with regular premiums ongoing) is nothing to them but if they do it to enough people it soon adds up and they lose business over the long run. I thought wanting to keep current customers would be a factor but obviously not
 
messyleo said:
Ideally facilitate closure of one policy and immediate reopening of the other, transferring across all the same paperwork etc. without needing to close one policy and start the paperwork process which may take a couple of weeks before you can start the new policy. I think there should be a smoother internal process for closing and opening a new one.
Click to expand...

Which provider of savings/investment policies allows you to do that?
 
Oscar16 said:
Zurich did say however, for the Prisma 5 new policy they would only allow 100% allocation instead of 101% as I already got 101% allocation when the €50,000 was set up with broker.
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Oscar16 said:
I will get 101% allocation for each of the new policies
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I cannot reconcile these two statements. Perfecty reasonalble for them to cover the levy for you once only on the original investment and not do it now on the same money.
 
On the financial consequences of replacing an existing policy (where exit tax is at play).

In really stark terms:

Invested €50,000 in 2021. Value was €62,000 in 2024 and decided to take the gain so ended up receiving €7,080 after deduction of 41%

Cashed in policy and reinvested the €50,000 in a lower AMC contract in 2025.

New policy dropped in value by €12,000 to €38,000.

In original policy the €4,920 would have been added back to the value.

In the new policy? Tough luck.

Of course, there are multiple other permutations on outcomes on values/terms but I don't think enough attention is paid to the exit tax regime in these types of scenarios. I'd prefer not to have to write a suitability letter in this situation.
 
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