Pension makeover

[cremeegg]

Now that pension age is getting closer its about time I gave my pension some thought. I would be grateful for any comments or suggestions.

As a couple we expect to have 4 sources of income in retirement.

1 The Irish state pension. I think we will both be entitled to the contributory oap
2 One partial UK state pension, projected at £40 per week
3 Private pensions as outlined below
4 Retirement Income from my business. The business property could be sold for €600k or produce an income for some years at least in retirement mode of €40k

The business will I hope provide a good income in retirement, but obviously there are business risks involved.

I am not risk adverse, but the business probably provides enough risk exposure, so for the pensions I am not looking for anything exotic.

There are 3 private pensions,

1 A buy out bond with Irish Life, invested in Global Consensus €51k, pension stability fund €9k

2 A "Money Purchase Plan" with Standard Life UK, invested in L&G "UK and Overseas Equity Fund" GBP£27k

3 A PRSA with Standard Life Ireland, invested in Standard Life managed €26K and Standard Life Cash €19k

These have grown up over the years rather than being the result of any initial planning, so I want to look at them to see if I should make any changes.

I am 50 this year. My youngest child should be financially independent in 10 years from now.

I would be very grateful for any comments. Thanks

 

[Steven Barrett]

Hi Cremeegg

The first thing that jumps out at me is you have no defined investment strategy. You've equity funds here and cash funds there. You have to think about what you want to achieve and then work out the risk required to achieve that goal. If the risk required is too much for your comfort zone, reduce your expectations or put in more money. Is it difficult to give any further advice on pension funds at this point.

Without knowing what your business is, I would guess this is a far bigger investment risk than your pension funds which mainly invest in large cap companies. Have you worked on a succession plan for your business? If you are passing it on, what contingency plans have you got if the business fails (very high proportion of businesses that are passed on fail). Is it an idea to sell the business?


Steven
www.bluewaterfp.ie