Pension and general financial advice

Early Riser said:
And that is very difficult to do in the Single Scheme, as it is based on career average earnings rather than final salary (as in older PS schemes). And, in turn, career average earnings are impacted not only by starting salary and final salary but whether promotions occur relatively early in the career or relatively late.

But as an example, here is a rough estimate. Lets say the OP accumulates 35 years service and has career average earnings amounting to €171,600 pa (in todays terms). At normal retirement age this should yield an annual pension in the region of €63,000 and a lump sum in the region of €225,000. (This annual pension excludes the State Pension, which does not count towards the Standard Fund Threshold).

In any event, the SFT should not present any barrier in his wife's case.
Click to expand...

Thanks Early Riser, this is very informative - starting at a high salary at a still young enough age was an important factor in joining the public sector given that I'm on the single scheme. I work with many senior colleagues in their late 50s/early 60s who are on 130k+ and started at the very bottom, that doesn't seem like a good route for senior posts at all now for my generation.

It's good to know that the SFT currently is not an issue - do you know if the threshold is indexed?

Anyway, on avcs it seems my plan should be:

1: Decide if I want to put any money into them at all
2: if yes to 1 then put money into wife's avc where possible
3: if I use up all wife's allowance in a year put them into mine

If my wife stopped working/took a career break can she still contribute avcs from other sources of income such as rental income/ dividends etc?
 
MrBrurns said:
do you know if the threshold is indexed?
Click to expand...
I have limited knowledge of the SFT but I believe it has been set at €2 million since 1st January 2014. Back in 2010 it was around €5.4 million. So it can go down as well as up. I doubt it will go down any further but will it go up to match inflation?

MrBrurns said:
If my wife stopped working/took a career break can she still contribute avcs from other sources of income such as rental income/ dividends etc?
Click to expand...
If she takes out an AVC (or PRSA-AVC) it will be specifically linked to her public sector pension. She cannot continue to contribute to the AVC (or, at least, get tax relief on it) if she is not working in her pensionable position. Otherwise she might be able to set up a separate private pension for other income - others may advise on this.

MrBrurns said:
Anyway, on avcs it seems my plan should be:

1: Decide if I want to put any money into them at all
2: if yes to 1 then put money into wife's avc where possible
3: if I use up all wife's allowance in a year put them into mine
Click to expand...

That sound like a good plan. As your wife is 34 she is limited for tax relief purposes to contributing 20% of her current pensionable remuneration to a pension. This is inclusive of whatever percentage she is contributing to the Single Scheme https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx
 
The life insurance argument is very interesting for me and not something I have considered.

I will discuss this with my wife and get her input on it as she would be the one primarily impacted if I died!

Re inheritance and family: My wife's family would have a similar amount of money to mine, I have had discussions with mine re what I and my siblings should expect etc. I don't know if she has had similar discussions with her own parents but I expect would be looked after by them if the worst happened.
 
Sarenco said:
I don't see any prospect of the SFT being increased in the foreseeable future.
Click to expand...
Nor do I but I wouldn't hazard a guess as to where it will be in real or nominal terms in 30 years. Likewise what marginal tax rates will be.

This is something I wouldn't begin to factor into planning unless my benefits were at three quarters of whatever the SFT of the day is.
 
Sarenco said:
In their alternative budget last year, Sinn Fein proposed reducing the SFT to €1.5m.

I don't see any prospect of the SFT being increased in the foreseeable future.
Click to expand...
Interesting,

uncertainty around what a fund will be worth in the future + variable threshold rules/lack of indexation etc make for lots of uncertainty
 
Last edited:
You must log in or register to reply here.
Back
Top