Pension investments

C

coolaboola12

Registered User
Messages
322
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 ?
 
How much has your pension increased by relative to the total contributions you have made since starting it?
 
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.
 
coolaboola12 said:
Hmmm . I only put it in global index tracker in last 6 years or so and prob grew around 50%
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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
 
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
 
coolaboola12 said:
Id like to retire at 60, should I maintain my current allocations or should I put some in a lower risk fund ?
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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.
 
joe sod said:
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
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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...
 
coolaboola12 said:
Id like to retire at 60, should I maintain my current allocations or should I put some in a lower risk fund ?
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BalanceContribGrowth @ 6.50%
​
45​
210,00030,00013,650
46​
253,65030,00016,487
47​
300,13730,00019,509
48​
349,64630,00022,727
49​
402,37330,00026,154
50​
458,52730,00029,804
51​
518,33230,00033,692
52​
582,02330,00037,832
53​
649,85530,00042,241
54​
722,09530,00046,936
55​
799,03230,00051,937
56​
880,96930,00057,263
57​
968,23230,00062,935
58​
1,061,16730,00068,976
59​
1,160,14230,00075,409
60​
1,265,55230,00082,261
61​
1,377,81330,00089,558
62​
1,497,37030,00097,329
63​
1,624,69930,000105,605
64​
1,760,30530,000114,420
65​
1,904,72530,000123,807
 
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If you switch to more conservative fund
BalanceContribGrowth @ 3.00%
​
45​
210,00030,0006,300
46​
246,30030,0007,389
47​
283,68930,0008,511
48​
322,20030,0009,666
49​
361,86630,00010,856
50​
402,72230,00012,082
51​
444,80330,00013,344
52​
488,14730,00014,644
53​
532,79230,00015,984
54​
578,77630,00017,363
55​
626,13930,00018,784
56​
674,92330,00020,248
57​
725,17130,00021,755
58​
776,92630,00023,308
59​
830,23430,00024,907
60​
885,14130,00026,554
61​
941,69530,00028,251
62​
999,94630,00029,998
63​
1,059,94430,00031,798
64​
1,121,74230,00033,652
65​
1,185,39530,00035,562
 
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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.
 
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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.
 
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.
 
misemoi said:
Should a plan be in place to switch to less risky funds coming closer to planned retirement date? So say 5 years out?
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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.
 
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