Currently 42 and plan to retire at 68. A little late to the game getting a PRSA AVC setup. Interested in whether I’ve missed anything with where I’ve landed on what I’ll do. New to selecting a pension product/fund, head's a little fried from reading posts and documents. I’ve attempted to do projections as best I can using current data/figures, though these could change over the years.
Current Situation
HSE Employment
PRSI
Projected Pension
PRSA AVC Plan
The above leaves €76,502 to max out the €200k tax free lump sum. SPSPS doesn’t allow AVCs and the value appears terrible for buying ‘additional benefits’. So best is to start a PRSA AVC. Minimum I can afford is €333 a month before tax relief, so cost to me €200 per month.
As best I can understand everything for someone in my shoes, with 33 years ahead, I should be:
A couple of PRSA AVCs that I’ve been considering are:
Option #1 appears to have the lowest fees, so I was planning to go with that. Am I missing anything obvious in this thinking given my situation? Maybe a can of worms question, but I’ve seen comments about paying off mortgage as an alternative priority over pension, but mortgage payments are comfortable.
Current Situation
HSE Employment
- Single Scheme (SPSPS) with 33 years of full service at retirement and final salary ~€120k.
- Calculated career average earnings (increments included): €99,796
- Projected SPSPS Referable Pension: €41,166
- Projected SPSPS Lump Sum: €123,498
PRSI
- Projected PRSI Contributions: 2,080
- Yearly State Pension: €15,043.60
Projected Pension
- SPSPS + State: €56,209.60 yearly
- SPSPS Lump Sum: €123,498
PRSA AVC Plan
The above leaves €76,502 to max out the €200k tax free lump sum. SPSPS doesn’t allow AVCs and the value appears terrible for buying ‘additional benefits’. So best is to start a PRSA AVC. Minimum I can afford is €333 a month before tax relief, so cost to me €200 per month.
As best I can understand everything for someone in my shoes, with 33 years ahead, I should be:
- Seeking a passive investment strategy
- Select a fund that is 100% equities and has some emerging markets exposure (~20%).
- Overtime gradually shift this 20% EM to developed world equities, and then closer to retirement shift to bonds.
- Choose a PRSA AVC that provides 100% allocation, has as low an AMC as possible, and has no policy fees
- If I’m selecting the funds then go with execution only.
A couple of PRSA AVCs that I’ve been considering are:
- 80% into Royal London BlackRock Developed World Equity Index Fund and 20% into Royal London BlackRock Emerging Markets Equity Index Fund.
- 80% into Zurich Indexed Global Equity (Blackrock) and 20% into Indexed Emerging Market Equity Fund (BlackRock)
- 100% into Standard Life Vanguard Global Index Fund
Option #1 appears to have the lowest fees, so I was planning to go with that. Am I missing anything obvious in this thinking given my situation? Maybe a can of worms question, but I’ve seen comments about paying off mortgage as an alternative priority over pension, but mortgage payments are comfortable.