Should I reduce my PRSA Contribution plus should I transfer cash bal into other funds

[DiStefano]

My question is in two parts.

1. I have approx €30k in Irish Life PRSA account which I contribute 10% on a monthly basis throught the company scheme. I have been given the option to reduce / increase my contributions? What should I do?

2. From a previous employment I have another approx €30k in a cash fund with a seperate pension provider in the form of a buy out bond which I can if I request transfer to a managed fund. Again what should I do?

All advice would be greatly appreciated!

 

[ClubMan]

Re: Should I reduce my PRSA Contribution plus should I transfer cash bal into other f

1. I have approx €30k in Irish Life PRSA account which I contribute 10% on a monthly basis throught the company scheme. I have been given the option to reduce / increase my contributions? What should I do?

Impossible to answer this without a lot more detail about your overall financial situation and what you consider to be the pros and cons of the three options.

2. From a previous employment I have another approx €30k in a cash fund with a seperate pension provider in the form of a buy out bond which I can if I request transfer to a managed fund. Again what should I do?

Why is it in a cash fund? If you are not about to retire imminently then it seems extremely odd and potentially a bad idea to have your money in a cash fund.

I don't really understand your question. The highlighted bit seems a big garbled. If the question is should you transfer from the cash fund to an equity based fund then unless you are just about to retire then I would say almost certainly yes.

 

[DiStefano]

Re: Should I reduce my PRSA Contribution plus should I transfer cash bal into other f

Impossible to answer this without a lot more detail about your overall financial situation and what you consider to be the pros and cons of the three options.

I am 35, > €150k savings, no loans or mortgage.

Why is it in a cash fund? If you are not about to retire imminently then it seems extremely odd and potentially a bad idea to have your money in a cash fund.

The highlighted bit seems a big garbled. If the question is should you transfer from the cash fund to an equity based fund then unless you are just about to retire then I would say almost certainly yes.

I am not great on how these pension funds work. I understand about the tax savings to be gained from contributing to a pension fund but am all at sea as to what my money is buying in funds terms? Is it advantageous to be buying in at this time? Or would I be better taking a % as income and paying in as an AVC when times get better?

I'm not about to retire, just never got around to transferring it. Is it advantageous to do that now or again wait for the markets to improve?

I hope I'm making sense!!

 

[ClubMan]

Re: Should I reduce my PRSA Contribution plus should I transfer cash bal into other f

Most pensions will offer a range of different funds investing in different asset classes (e.g. equities or indices of different types, property, bonds/gilts, cash etc.). When you have a long time to go to retirement it makes sense to at least consider investing in funds with a high equity content and maybe diversifying into other high risk/reward asset classes. But conservative funds (e.g. bonds, cash etc.) should probably only be used by those nearing retirement - e.g. gradually shift higher risk/reward investments into these sorts of funds to mitigate volatility when nearing retirement. Your pension should be a very long term investment and, as such - in my opinion, you should largely forget about timing the market and changing investment strategy based on short term market conditions. Timing the market in general is a mug's game.

Since you admit to being unaware of how these things work you should probably consider getting independent, professional advice.

 

[DiStefano]

Re: Should I reduce my PRSA Contribution plus should I transfer cash bal into other f

When you have a long time to go to retirement it makes sense to at least consider investing in funds with a high equity content and maybe diversifying into other high risk/reward asset classes..... Your pension should be a very long term investment and, as such - in my opinion, you should largely forget about timing the market and changing investment strategy based on short term market conditions. Timing the market in general is a mug's game.

Since you admit to being unaware of how these things work you should probably consider getting independent, professional advice.

I agree with you that it makes sense to consider investing in high equity funds at my age (35) but would you say that now is the time to make that move? I'm not trying to time the market, just wondering if I'b be a mug for transferring the cash fund into high equity funds at this time? I know you also say I should consider getting independent, professional advice and I take that on board and will do, but would welcome your comments at this stage.

 

[GSheehy]

Re: Should I reduce my PRSA Contribution plus should I transfer cash bal into other f

You don't have to transfer it all in just one switch.

Why not decide on a strategy where you transfer a certain aount each month over a period of time, if you are more comfortable with that.