Moneymakeover Which Public Sector AVC fund to choose, to retire in 5 years aged 55 based on Long Term Illness?

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techiedubliner

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Personal details:
Your age: 50
Your spouse's age: 47
Number and age of children: 2 Children Aged 20 (University) & 16

Income and expenditure
Annual gross income from employment or profession: 62K
Annual gross income of spouse/partner: 60K

Total Monthly take-home pay = 5500 (Me + Wife)

Type of employment:
Me: Employed, Civil Service
Wife: Employed, HSE

In general are you:
(a) spending more than you earn, or
(b) saving? Saving

Summary of Assets and Liabilities
Family home value: 360K
Mortgage on family home: 190K

AVC: 600 euro per month (Paid before tax from my salary). Wife is having her own AVC

Family home mortgage information
Lender : BOI
Type of interest rate: Tracker ECB + 1.25%

Remaining term: 17 Years originally, May finish earlier as I pay extra each month.
Monthly repayment: 1200 (Paying 2000 euro - 800 euro extra)

Pension information
Value of pension fund: FORSA AVC only started 2 years back (Current value around 6000 euro). Total Public Sector experience around 6 years. No other pensions from private employment,

Other savings and investments:
25000 Savings

Other information which might be relevant

Life insurance: Yes - Linked to Mortgage

What specific question do you have or what issues are of concern to you?
I am currently working in Public Sector and has some long term ill health issues. So I am thinking about retiring in 5 years aged 55 based on Long Term Illness basis. Regarding my AVC, I am willing to take more risk and would like to switch to funds with more growth.

My options are below. I have Public Sector Adventurous fund in mind to switch to.

Is there something else that you would advice me to switch to? Thanks.

Fund Options.webp
 
Who set up your AVC? Irish Pensions and Finance or Cornmarket perhaps? Those two charge high fees and you could be better off going self directed route with a PRSA AVC that have lower fees.

If possible you should be putting in the max AVC allowed for your age and income.

Have you checked your PRSI contribution history with Revenue, you need 2080 to get full state pension at age of eligibility, currently 66.

Your wife should do the same.. AVCs + PRSI contribution record.

Do you have a good idea of how much you are spending every year? Now is a good time to start documenting that accurately. Keep all receipts, bills and invoices and add them up. Could use a log book and a pen or a spreadsheet program to keep track. Yes it's boring but necessary especially if you want to retire soon and are not sure if you will have enough to live on.
 
It was CornMarket who setup the AVC.

I am currently on Public Sector balanced fund. What about moving to Public Sector Adventurous fund or some thing with more growth prospects even though bit riskier?
 
I spoke with them recently and they said adventurous might get 6% growth and then you minus the AMC, so maybe 4.8% in a good year. If I were you I'd go with a provider who's a bit more adventurous than that, but hard to recommend without knowing your full situation and appetite for risk. I'm surprised you were offered all the funds above. Did they offer them to you or did you Google and find them yourself?

Being in balanced you're going to just about out perform their fees. Their attitude is - you get 40% tax relief, what more do you want? I've set up a separate PRSA, paying with net income and then claiming tax back each January , to avoid them and their bad returns.
 
You have €6000 in your AVC fund to which you are adding €600 a month and you have about 6 years of pension benefits accumulated in your public sector job. No other pensions. You didn't say how many PRSI contributions you have built up so far. You want to retire in about 5 years. You have €190k outstanding on your mortgage.

You are not going to build a substantial AVC fund in a five year time frame as things stand no matter what fund you choose or AMC a provider charges you. Likewise 5 more years of accumulated pension benefits giving a total of 11 years contributions will still leave a modest DB pension based on a 62k salary.

In your favour is that you are married and your wife can build similar pension income however it sounds like she may not plan on retiring any time soon.

Your priority should be to configure your life so you can work as long as possible in order to keep earning an income as long as you can because in all honesty you are in no position to consider retirement anytime soon. It would help you to document exactly what your current lifestyle it is costing you because that can form the basis for what income you may need going forward to live on if you choose to retire or have no choice to do so.
 
Have you looked into what ill-health related early retirement means in the post-2013 scheme? I can't find much online about it. I can't imagine they'd give much with 11 years service, and you'll have to be independently assessed to be medically unfit for any kind of work. But as CharlieMac says, the best course of action would be to alter your working life to one you can continue into your 60s.
 
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