Josey Wales
Registered User
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If you complete the full 40 years is there any point in investing in AVCs? Am I getting ahead of myself thinking about my pension with 28 years still to go. I plan on talking to a financial advisor but wasn't sure if they would be au fait with the workings of public sector pensions.
For one, if your anticipated PS pension + the State pension would be likely to put you into the high rate of tax in retirement
Liam D. Ferguson
minor note, but the OP joined the PS after 1995, so his PS pension includes the State Pension, he will not receive 2 separate pensions.
While I agree with the jist of your post, and in particular the recommendation to look at the overall financial picture, I wonder if you are underplaying the tax benefit.With a potential 40 years' service, you'd have a certain amount of scope to make AVCs to bridge the gap between the Public Sector pension and the maximum pension that Revenue will permit. A bigger question would whether or not doing so would be a good idea. For one, if your anticipated PS pension + the State pension would be likely to put you into the high rate of tax in retirement, then I wouldn't be inclined to make substantial (if any) AVCs. If you're only going to get tax relief at 41% on the contributions but would be taxed at 41% on the proceeds on the way out, there's little incentive.
Isn't there a substantial benefit available from being able to contribute gross amounts to an AVC and get the growth arising from those gross amounts, even if you have to pay tax on drawdown?
Hi,
I've recently been thinking about my financial situation. I have recently inherited a lump sum and need to get good financial advice. One thing that I have been thinking about is my pension.
I'm 31 and have been working in the civil service since 1999. As it stands I expect to complete my 40 years without a break in service. I am trying to decide if the public sector pension will be good enough when I retire. And if I should invest in AVCs or a PRSA.
If you complete the full 40 years is there any point in investing in AVCs? Am I getting ahead of myself thinking about my pension with 28 years still to go. I plan on talking to a financial advisor but wasn't sure if they would be au fait with the workings of public sector pensions.
I hope I've managed to articulate a question in there somewhere.
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