Regular saving's versus PRSA payments

[racso]

I am wondering which would be better. Currently if i invest 177 a month into a prsa i will get an estimated return of 166000 in 33 yrs time. The amount that i would actually be investing over that period would be approx 70grand.

I know i will be able to invest more as i get older due to mortgage being cleared and larger salary etc etc.

So the bottom line is would i be better off looking at a long term fund that allows regular monthy contributions versus paying into a prsa?

 

[ClubMan]

What tax rate are you on? Have you factored in the significant tax advantages of a pension - e.g. full tax and PRSI relief on contributions up to your age related % of earnings limit, the ability to take 25% lump sum tax free at retirement etc.? Of course a key downside is that the money is locked away until retirement. Don't pay too much attention to investment fund (including PRSA) projected returns as they are not quaranteed and returns are dependent on future market performance. These projections/illustrations are only really of use for comparing the effect of charges on different products from different providers (if all used the same assumed growth rate - usually 6% or 8% or something like that). If you are saving for retirement then chances are some form of pension is a no brainer especuially if you are a high rate taxpayer. If you are saving towards pre retirement goals then some other form of general investment is probably more suitable. Read the IFSRA and AAM guides to savings & investments linked from the Savings & Investments key posts thread as they explain in more detail what to consider when choosing short, medium and long term savings/investment options.