Key Post My pension pot has reached €800k - should I stop contributing ?

garbanzo

Registered User
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84
You are of course correct. I wasn't focusing on the exact mathematics more the practical principles.

We like to paint pictures to illustrate the points. This is a real client's ARF account over the last 5 years. The original capital is the red line showing the annual distributions coming off each year and the blue line is the account value. Working perfectly...

1624189924054.png


Best options for short term liquidity is still State Savings I recently updated my analysis here

to reflect the new less attractive, but still relatively good (compared to the bank) terms

Longer-term taxable investment accounts are best managed with a pure equity portfolio of non-EU ETFs and dial down the risk in the pension to accounts to compensate

That example is both fascinating and reassuring Marc. Thanks for sharing.
What income are they drawing from it?
 

Marc

Registered User
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1,638
That example is both fascinating and reassuring Marc. Thanks for sharing.
What income are they drawing from it?
The account is under €2m and the investor under age 71 so 4% is the imputed distribution rising to 5% for no good reason (other than to soak more income tax) at age 71
 

Sarenco

Registered User
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7,312
Longer-term taxable investment accounts are best managed with a pure equity portfolio of non-EU ETFs and dial down the risk in the pension accounts to compensate
I would be interested in understanding your thinking here.

With ultra low (or negative) interest rates, I would have thought it would be more efficient to hold cash and/or fixed income instruments in taxable accounts and equities in tax-deferred pension accounts.

Interest rates on cash deposits in pension accounts are currently negative (and attract fees), which is not the case with retail deposits.
 
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