Pension investments

[coolaboola12]

Hi all

I'm 45 with 210k in pension and currently it's in a global index tracker with 100% allocation and 0.12% AMC

I currently contribute 2500 per month

Id like to retire at 60, should I maintain my current allocations or should I put some in a lower risk fund ?

 

[joe sod]

How much has your pension increased by relative to the total contributions you have made since starting it?

 

[coolaboola12]

Hmmm . I only put it in global index tracker in last 6 years or so and prob grew around 50%

 

[Sarenco]

My personal opinion (and I know others regard this as excessively conservative), is that it is prudent to have 10 years of anticipated expenses in cash at retirement.

Importantly, that cash buffer doesn’t have to be in your pension - it could be made up of after-tax savings.

I don’t have a strong view as to when you should “glide” to this allocation but with 15 years to retirement, I personally think it’s fine to be 100% in equities if you can handle the volatility.

 

[joe sod]

Hmmm . I only put it in global index tracker in last 6 years or so and prob grew around 50%

That's alot better than mine, I have prsa for 10.5 years and only up around 55% or so. How did you get such a low AMC of 0.12%, mine is 1% , but that probably explains the better performance in your pension. My personal opinion would be to stick with what you are doing especially with that very low annual charge

 

[coolaboola12]

I'm in a very large corporate scheme thankfully

 

[joe sod]

Just shows you the disadvantage people are at that don't have a occupational pension. The government at least should have been helping those by paying the AMC to level the playing field given that they have delayed yet again auto enrolment

 

[Fortune]

The government at least should have been helping those by paying the AMC to level the playing field given that they have delayed yet again auto enrolment

Don't worry, they're ensuring that the auto enrollment AMCs are nice and high too

 

[kickstart]

Id like to retire at 60, should I maintain my current allocations or should I put some in a lower risk fund ?

Nobody can predict the future value, but you're doing everything right at the moment. Your AMC is sure to inspire envy, and you're aware of your fund options for increased returns/risks. One thing to ask - are you putting in your max contribution for your age and salary? If not, and if you're not aware of any pressing need if you've excess money at the moment, you can do worse than up your AVCs, even if only temporarily. I'm glad I upped mine, and wish I'd done it more and sooner and got used to living within what was left.

 

[ClubMan]

Your AMC is sure to inspire envy

Indeed. Impressive!

100% allocation and 0.12% AMC

 

[messyleo]

100% allocation and 0.12% AMC

Are you hiring atm?

 

[Steven Barrett]

Just shows you the disadvantage people are at that don't have a occupational pension. The government at least should have been helping those by paying the AMC to level the playing field given that they have delayed yet again auto enrolment

Their employer is paying the additional cost of administration and advice (there tends to be very little advice in the larger schemes mind). If you have your own pension, you pay the whole cost.

I am not sure asking the government to cover the fees of private pensions is a good use of Exchequer funds...

 

[AJAM]

Id like to retire at 60, should I maintain my current allocations or should I put some in a lower risk fund ?

	Balance	Contrib	Growth @ 6.50%	​
45​	210,000	30,000	13,650
46​	253,650	30,000	16,487
47​	300,137	30,000	19,509
48​	349,646	30,000	22,727
49​	402,373	30,000	26,154
50​	458,527	30,000	29,804
51​	518,332	30,000	33,692
52​	582,023	30,000	37,832
53​	649,855	30,000	42,241
54​	722,095	30,000	46,936
55​	799,032	30,000	51,937
56​	880,969	30,000	57,263
57​	968,232	30,000	62,935
58​	1,061,167	30,000	68,976
59​	1,160,142	30,000	75,409
60​	1,265,552	30,000	82,261
61​	1,377,813	30,000	89,558
62​	1,497,370	30,000	97,329
63​	1,624,699	30,000	105,605
64​	1,760,305	30,000	114,420
65​	1,904,725	30,000	123,807

 

[AJAM]

If you switch to more conservative fund

	Balance	Contrib	Growth @ 3.00%	​
45​	210,000	30,000	6,300
46​	246,300	30,000	7,389
47​	283,689	30,000	8,511
48​	322,200	30,000	9,666
49​	361,866	30,000	10,856
50​	402,722	30,000	12,082
51​	444,803	30,000	13,344
52​	488,147	30,000	14,644
53​	532,792	30,000	15,984
54​	578,776	30,000	17,363
55​	626,139	30,000	18,784
56​	674,923	30,000	20,248
57​	725,171	30,000	21,755
58​	776,926	30,000	23,308
59​	830,234	30,000	24,907
60​	885,141	30,000	26,554
61​	941,695	30,000	28,251
62​	999,946	30,000	29,998
63​	1,059,944	30,000	31,798
64​	1,121,742	30,000	33,652
65​	1,185,395	30,000	35,562

 

[AJAM]

Note the Balance is at the start of the period.
So with the current 100% global tracker, you could expect roughly 1.37M at the end of the year at 60.
Moving to a more conservative fund you could expect roughly 941K at the end of the year age 60.

 

[AJAM]

By the way, when comparing pension funds, it is absolutely pointless to compare them across 1Mo, 3Mo, 6Mo, 1 year periods.
The minimum you should be comparing against is 5 years and preferably 10 years.

 

[coolaboola12]

Thanks for that great info

 

[misemoi]

Should a plan be in place to switch to less risky funds coming closer to planned retirement date? So say 5 years out?

 

[Kandarra]

For your age the tax relief limit is 25% on up to €115,000 annual earnings. This is €28,750 per year, €2,395 per month. Is some of your €2500 monthly contribution made up of a company contribution? If your income is at or above €115k you may be able to increase your personal contribution as the company contribution does not count towards the tax relief limit.

 

[ClubMan]

Should a plan be in place to switch to less risky funds coming closer to planned retirement date? So say 5 years out?

If the plan is to buy an annuity, perhaps.
If the plan is to roll over into an ARF or vested PRSA, perhaps not as the investment timeframe is then one's lifetime.
But a lot also depends on one's appetite for risk/volatility and overall financial circumstances.
Note that where one qualifies for a public service or contributory state pension then that represents an effective guaranteed annuity income from age 66 or whatever. That can offer flexibility to deal with more risk/volatility than one might otherwise consider.