55 year old with 300K lump sum to invest.

M

MattressMan

New Member
Messages
3
Personal details
Age: 55
Spouse’s/Partner's age: 45
Number and age of children: 3 (12,10,7)
Income and expenditure
Annual gross income from employment or profession: 65K
Annual gross income of spouse: zero
Monthly take-home pay €4000
Type of employment: Permanent in Pharmaceuticals
In general are you: Saving ~€500 per month

Summary of Assets and Liabilities
Family home worth €400k with no mortgage
Cash of €300k
Defined Contribution pension fund: Zero
Company shares : zero
Other Property: None

Family home mortgage information
None

Other borrowings – car loans/personal loans etc

Do you pay off your full credit card balance each month? Yes
Buy to let properties
None
Other savings and investments:
Do you have a pension scheme? Company pension fund ?220K
Other information which might be relevant
Life insurance: None
What specific question do you have or what issues are of concern to you?​
Hi All, I’m looking for somewhere to invest a lump sum of 300K while minimising Annual Management and other charges. Does anyone have any suggestions? Risk appetite of Irish Life Map 4 / Zurich Prisma 4.
 
The average pension fund at maturity in Ireland is still circa €150,000.

The average pension fund (or aspirational fund) at maturity for many AAM contributors is many multiples of that ie. loads of posts on €800K and €2m funds.

As a new contributor, just be aware of that.

The advice on the maxing of pension contribution is solid though.


Gerard

www.bond.ie
 
Thanks for the replies. I’m currently making pension contributions that maximise the tax benefits. Just looking for somewhere to stick the lump sum really.
 
MattressMan said:
Thanks for the replies. I’m currently making pension contributions that maximise the tax benefits. Just looking for somewhere to stick the lump sum really.
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100k in Raisin perhaps and remainder in low risk managed fund with blue chip equities.
 
MattressMan said:
Hi All, I’m looking for somewhere to invest a lump sum of 300K while minimising Annual Management and other charges. Does anyone have any suggestions? Risk appetite of Irish Life Map 4 / Zurich Prisma 4.
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As an option, you could buy that Zurich fund via this website that I have with an Annual Management Charge of 0.65% and the (current) Other Ongoing Charges for Prisma 4 Fund are 0.07% so the TER is 0.72%


Gerard

www.bond.ie
 
Horatio said:
What does 101% allocation mean?
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On every investment/savings contract there is a 1% Government Levy. That levy is on the investor/saver so it's an additional charge and equates to circa 0.15% per annum, as an entry charge, in a Key Investment Document (KID).

With some investments the product provider covers the cost of this by allocating an extra 1% to your investment.

You invest €10,000, the 1% Government Levy is deducted and paid to Revenue giving you a 'premium' of €9,900.

The 101% allocation is applied to this premium and that brings your investment back up to €10,000. That €10,000 is then used to buy units in the fund.

The 101% Allocation is generally stated on the policy schedule.

If the 1% Levy wasn't there, I think that we would have more competitive Annual Management Charges.


Gerard

www.bond.ie
 
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GSheehy said:
On every investment/savings contract there is a 1% Government Levy. That levy is on the investor/saver so it's an additional charge and equates to circa 0.15% per annum, as an entry charge, in a Key Investment Document (KID).

With some investments the product provider covers the cost of this by allocating an extra 1% to your investment.

You invest €10,000, the 1% Government Levy is deducted and paid to Revenue giving you a 'premium' of €9,900.

The 101% allocation is applied to this premium and that brings your investment back up to €10,000. That €10,000 is then used to buy units in the fund.

The 101% Allocation is generally stated on the policy schedule.

If the 1% Levy wasn't there, I think that we would have more competitive Annual Management Charges.


Gerard

www.bond.ie
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How does the product provider recoup that cost ? And where do they disclose it.
 
@cremeegg

If you take my post above #7 where AMC is 0.65%, the 1% is recovered via that as there are early exit charges in first 3 years. They recover it in 2 years.

They're not going to make much on the transaction if you only stay 3 years but they hope you'll stay invested longer.

It's usually disclosed at the point of sale, as it's a plus for the client and then stated on the policy schedule in the form of (something like) - 101.00 % of Premiums excluding Levy Used to Purchase Units at the Ruling Bid Price

Gerard

www.bond.ie
 
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GSheehy said:
@cremeegg

If you take my post above #7 where AMC is 0.65%, the 1% is recovered via that as there are early exit charges in first 3 years. They recover it in 2 years.

They're not going to make much on the transaction if you only stay 3 years but they hope you'll stay invested longer.

It's usually disclosed at the point of sale, as it's a plus for the client and then stated on the policy schedule in the form of (something like) - 101.00 % of Premiums excluding Levy Used to Purchase Units at the Ruling Bid Price

Gerard

www.bond.ie
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When an increased allocation is used to reduce charges remember to add the extra to the charge taken.

€100
101% allocation
€101
Charges
1% levy
0.65%amc
€101 x 1.65% =1.665% charge rather than 1.65%
 
Marc said:
I’m drawing attention to the fact that if you increase the initial value by smoke and mirror allocation rates they take more than 1% back again
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Sorry, but that doesn't wash. Yes if you add 1% allocation you increase the AMC. But then you deduct 1% Levy and that reduces the AMC by the exact same amount. Are you standing my your assertion that after both the 1% extra allocation and the 1% levy that the 0.65% AMC becomes 0.665% of the initial investment?
 
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Duke of Marmalade said:
Sorry, but that doesn't wash. Yes if you add 1% allocation you increase the AMC. But then you deduct 1% Levy and that reduces the AMC by the exact same amount. Are you standing my your assertion that after both the 1% extra allocation and the 1% levy that the 0,65% AMC becomes 1.665% of the initial investment?
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I didn’t say the AMC increases

I said an increased allocation has the effect of increasing the fees deducted
 
Marc said:
I didn’t say the AMC increases

I said an increased allocation has the effect of increasing the fees deducted
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Look, you said 1.65% becomes 1.665%. BTW I just notice that you meant 0.65% becomes 0.665%, a mistake which I actually followed.
But on the substantial point you made a boo-boo. 'Fess up like a man.
Maybe you're confusing it with a very, very minor discrepancy. If the 1% extra allocation is applied after the deduction of the levy rather than before then the initial fund is 99.99% of the investment. Nuffin' to do with AMCs.
 
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