RetirementPlan
Registered User
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Hi AAM folks, I would welcome your views on how best to maximise my pension.
I'm in an Engineer grade public servant (post 2004 entrant) with about five years to go to retirement. I bought additional years service when the rates were better than now, so I'll be retiring with about 35 years service on a basic salary level around €90k. With adult kids around, I don't have any extra spare funds to put into my pension, beyond standard deductions.
I also have some private pension money from the halcyon Celtic Tiger days. This fund is currently valued at €160k. I've started moving chunks of this fund to lower risk investments as I approach retirement.
The key question for me is whether there is any value for me in retiring early for the purpose of my private fund to get my hands whatever the current value of the €160k is, and 'recycling' that money into AVC purchases on my main employment to maximise tax benefits.
So let's say I retired from the private fund at age 62, and used €20k each year to buy AVCs for my remaining three years. With the tax saving, I think this €20k could get me €28k approx into an AVC fund each year, adding €24k (€8k a year for three years) 'bonus' to my total fund when I come to retire at 65.
Obviously, there would be a bit of admin involved and some charges on the AVC side, but does this approach sound vaguely feasible? I discussed this with one expert, who mentioned I'd be getting close to the €200k limit on the tax free lump sum. I previously 'retired' to get my hands on an AVC fund worth €15k some years back. I'd be happy enough to have the extra money going towards a higher regular pension rather than the lump sum if that was feasible.
So in short, should I be trying to recycle money from my private pension fund into AVCs on my main employment for my last few working years?
Thanks in advance
I'm in an Engineer grade public servant (post 2004 entrant) with about five years to go to retirement. I bought additional years service when the rates were better than now, so I'll be retiring with about 35 years service on a basic salary level around €90k. With adult kids around, I don't have any extra spare funds to put into my pension, beyond standard deductions.
I also have some private pension money from the halcyon Celtic Tiger days. This fund is currently valued at €160k. I've started moving chunks of this fund to lower risk investments as I approach retirement.
The key question for me is whether there is any value for me in retiring early for the purpose of my private fund to get my hands whatever the current value of the €160k is, and 'recycling' that money into AVC purchases on my main employment to maximise tax benefits.
So let's say I retired from the private fund at age 62, and used €20k each year to buy AVCs for my remaining three years. With the tax saving, I think this €20k could get me €28k approx into an AVC fund each year, adding €24k (€8k a year for three years) 'bonus' to my total fund when I come to retire at 65.
Obviously, there would be a bit of admin involved and some charges on the AVC side, but does this approach sound vaguely feasible? I discussed this with one expert, who mentioned I'd be getting close to the €200k limit on the tax free lump sum. I previously 'retired' to get my hands on an AVC fund worth €15k some years back. I'd be happy enough to have the extra money going towards a higher regular pension rather than the lump sum if that was feasible.
So in short, should I be trying to recycle money from my private pension fund into AVCs on my main employment for my last few working years?
Thanks in advance