# What does your pension portfolio look like?



## gnf_ireland (23 Oct 2018)

I am wondering if anyone is willing to share what their pension portfolio looks like? I am really struggling as to what others do pension wise, especially those who self-manage theirs.. 

To start matters, I am in my early 40's with roughly 20 years to retirement. I have an Executive Pension roughly paying 20% of my salary into the fund per annum, contributing monthly. My pension pot is currently around 3.5 times my annual salary. I have been contributing to the pension fund for roughly 12 years.

The pension consists of 5 funds managed by Zurich, and mostly having a risk factor of 5 (out of 7) but one is listed as a 4.

The current distribution is 

Equities 66.0% [was at 85% but they appear to have reduced exposure recently]
Bonds 15.4%
Alternatives 13.7%
Property 3.4%
Cash 1.5%

Anyone else willing to share their pension situation ?


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## rob oyle (23 Oct 2018)

Deferred pension fund is 100% invested in equities, 39 years old. Currently between roles but where available my pension contributions for the foreseeable future will be going 100% into equities too.


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## gnf_ireland (23 Oct 2018)

rob oyle said:


> 100% invested in equities


Thanks Rob - is this across multiple funds or a single fund? I assume it is with an insurance company? Any breakdown on industry, capitalisation or region?
Have you given any consideration to property (even REIT's) or alternatives/commodities etc? 

And can I cheekily ask the approximate size of the pot in relation to your relative salary (ballpark) to try quantify the risk? You can PM this if you prefer not to publish it !


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## rob oyle (23 Oct 2018)

gnf_ireland said:


> Thanks Rob - is this across multiple funds or a single fund? I assume it is with an insurance company? Any breakdown on industry, capitalisation or region?
> Have you given any consideration to property (even REIT's) or alternatives/commodities etc?
> 
> And can I cheekily ask the approximate size of the pot in relation to your relative salary (ballpark) to try quantify the risk? You can PM this if you prefer not to publish it !



It´s a former employer scheme and it´s a singular equity fund - I don´t have any details on share concentrations or makeup.  I can see its value has increased by 6% over the last 12 months, if that´s any help.

I have some savings in equities also, including Irish REITs over the last few years, which have proven to be very poor relative to the value of properties themselves in that same period.

The pot was about 3x my final salary at the time I finished, I had been contributing c.11% and my employer 8% over 14 years.


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## Gordon Gekko (23 Oct 2018)

Hi gnf ireland.

I’ve about 25 years to go to retirement and I’ve around €350k in my fund.

As an aside, I think that yours is too conservative.

I’m 100% in Equities; very recently, I moved 1/3 of it to Emerging Market Equities, given they’ve fallen by circa 25%, with the balance remaining in Global Equities.

About €43k is going in each year.


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## gnf_ireland (23 Oct 2018)

@rob oyle Thanks for that. We are roughly contributing the 20% level for roughly the same period and the two pots are roughly aligned, give or take. Mine obviously has reduced equities recently - the main funds are multi-asset funds rather than pure equities. Maybe this is something to consider over the next while... 



Gordon Gekko said:


> As an aside, I think that yours is too conservative.


@Gordon Gekko  noted re 100% Equities versus the multi-asset funds, and this is something I will look into.
Can I ask is yours as SSAP and if so, do you purchase using directly using ETF's or is it via an insurance company

Well done on the amount going in each year - puts my number to shame  Maybe when the childcare bill reduces a bit further, but something to target !

BTW with that amount going in, are you not concerned you will blow the 2m limit ?


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## Gordon Gekko (23 Oct 2018)

Yes, but I’d like to get to the limit and then access it early.


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## gnf_ireland (23 Oct 2018)

Gordon Gekko said:


> Yes, but I’d like to get to the limit and then access it early.


good approach if you are in a position to do so !


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## Sarenco (23 Oct 2018)

I think it’s unwise to focus on any particular account in isolation.

A 40-year old with, say, €350k in a pension vehicle and a mortgage-free house has a completely different risk profile to somebody of the same age with a similar sized pension pot that is carrying a €750k mortgage.

IMO you can only rationally look at asset allocation in the context of your overall financial position, having regard for all accounts and individual personal circumstances.


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## Gordon Gekko (23 Oct 2018)

I don’t think that’s correct at all Sarenco.

Whether someone with €350k in his/her pension fund and >20 years to go to retirement has a mortgage or doesn’t have a mortgage should have no impact on his/her risk profile.

Subject to managing the behavioural side of investing, both should be 100% invested in equities.

The existence of debt outside of the fund has no relevance to the asset allocation for the fund.


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## Sarenco (23 Oct 2018)

Gordon Gekko said:


> The existence of debt outside of the fund has no relevance to the asset allocation for the fund.


Well, I take the view that what is owed (or owned) outside a pension vehicle is very relevant to any rational discussion about asset allocation.  A mortgage is effectively a “negative bond” at the end of the day (it’s money you owe somebody else, plus interest).

Considering individual account balances (positive or negative) in isolation is just “mental accounting”.

That’s not to say that I think it is inappropriate for somebody to contribute to a pension while carrying a mortgage.

I simply think that asking how do you allocate your pension savings in isolation is meaningless.


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## Gordon Gekko (24 Oct 2018)

I don’t believe that’s correct. You’re taking a general rule (i.e. that one should look at one’s overall asset allocation) but then allowing that to cloud the analysis in relation to a pension which has very different attributes and rules.

Forget that it’s a pension. If we were talking about a personally held investment account, I’d agree with you 100%. But say we were talking about a personally held investment account that could not be touched for 20 years; the existence of a mortgage or otherwise shouldn’t be relevant, it should be equities all the way for that individual as he/she has the time horizon to ride out any volatility, with the necessary handholding when markets are weak obviously.


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## aristotle (24 Oct 2018)

Gordon Gekko said:


> I’m 100% in Equities; very recently, I moved 1/3 of it to Emerging Market Equities, given they’ve fallen by circa 25%, with the balance remaining in Global Equities.



How do you make a decision to get into the likes of an Emerging Market Equities fund, is it purely based on the fact that it fell 25% and you expect it to regain it losses? Or have you done more research than that?

I have funds in Zurich in a 94% equity fund and tend to avoid moving to specific things like Emerging Markets because I have no clue on whether its a good decision or not.


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## Gordon Gekko (24 Oct 2018)

Hi aristotle,

No, it wasn’t purely on that basis. It was very much based on the work of some of my friends.

All the best,

Gordon


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## Steven Barrett (24 Oct 2018)

I'm 20+ years from retirement (approaching 43 years of age, not sure when/if I want to retire but it will be in my 60s). 100% equity including some exposure to smaller companies. Not bothered with short term values of it. 


Steven
www.bluewaterfp.ie


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## gnf_ireland (24 Oct 2018)

Sarenco said:


> Well, I take the view that what is owed (or owned) outside a pension vehicle is very relevant to any rational discussion about asset allocation.  A mortgage is effectively a “negative bond” at the end of the day (it’s money you owe somebody else, plus interest).
> Considering individual account balances (positive or negative) in isolation is just “mental accounting”.
> That’s not to say that I think it is inappropriate for somebody to contribute to a pension while carrying a mortgage.
> I simply think that asking how do you allocate your pension savings in isolation is meaningless.



Surely the only difference a mortgage (and potential house value) makes to a pension/retirement conversation in real terms is if the person will have their mortgage paid off by then, or whether there will have a rent/mortgage payment to make in retirement? The other factor is of course the property tax charge on the home, and cost of upkeep. The other consideration would be whether someone is planning to downsize to release equity from their home or not, although this is not exceptionally common in reality.

In terms of non-pension savings, for most people this is either relatively minor (rainy day fund) or some targeted spends such as children's education, house deposit and/or renovations. Someone with >20 years of living ahead of them, whether they have 100k in the bank now or not is probably more relevant on what they plan to spend the money on. 

For example, its highly likely my two girls will end up in private second level before going to college of some sort. This is likely to be 10 years of education funding of say 7,500 euro * 2 children = 150k. If I have 100k in the bank now, its unlikely it will be sitting there by the time i get to retirement.

Those who have extensive investments outside a pension fund are either (a) not using the pension fund as their primary means of saving to retirement or (b) wealthy enough that its not a major issue for them either way.

I appreciate the sentiment, but for most people are not in category b above for it to be meaningful in 20 years time.


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## gnf_ireland (24 Oct 2018)

SBarrett said:


> 100% equity including some exposure to smaller companies. Not bothered with short term values of it.


@steven - can I ask if this is via a SSAP or with insurance companies? 
How many funds (or ETF's) have you invested in ? Do you consider REIT's as equities?


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## Brendan Burgess (24 Oct 2018)

Gordon Gekko said:


> Whether someone with €350k in his/her pension fund and >20 years to go to retirement has a mortgage or doesn’t have a mortgage should have no impact on his/her risk profile.



Hi Gordon 

I'm with Sarenco on this one but you do raise an interesting point.  But we might not be that far apart. 

I think we all agree with this: 



Sarenco said:


> I think it’s unwise to focus on any particular account in isolation.




I think we all agree that a pension fund should be 100% in equities? 

So maybe we all arrive at the same result even if we disagree on how we get there? 

Of course, I would argue that if you have a €500k house with a mortgage of €750k, you should not be contributing to your pension fund and should be focussing on paying down your mortgage. 

Brendan


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## Steven Barrett (24 Oct 2018)

gnf_ireland said:


> @steven - can I ask if this is via a SSAP or with insurance companies?
> How many funds (or ETF's) have you invested in ? Do you consider REIT's as equities?




I have a number of different pensions, all with insurance companies. One is split between US, European and Emerging Mkts equities. The others are split between Developed Mkt, Emerging Mkt and Smaller Companies. 

I would treat a REIT as an equity. They are traded on the stock exchange and stock market volatility effects them. But even within the REIT universe, some pay decent regular dividends and others pay irregular ones. So you need to know what you are investing in. If you are investing in a REIT fund, you don't have that choice. 


Steven
www.bluewaterfp.ie


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## Sarenco (24 Oct 2018)

@Gordon Gekko

I don't disagree that an investor with a long investment horizon should have a greater exposure to risk assets and I'm unsure why you think I am suggesting otherwise.

I consider somebody who is investing in equities through a pension vehicle, while simultaneously carrying a mortgage, to have leveraged exposure to both property and equities.  That's an exposure in excess of 100% to those risk assets.  I think that's entirely appropriate for a young investor with a long investment horizon but may not so appropriate for an older investor that is nearing retirement.

It's really not at all uncommon for folks that are advanced in their working lives to own a mortgage-free house and to have substantial cash savings (perhaps as a result of an inheritance) sitting on deposit outside their pensions.  It may well be appropriate for such investors to maintain a high allocation to equities in their pension vehicles.  For others, different considerations might apply.

Again, it's an investor's overall financial position that matters and I'm very wary of any catch-all "rule" based on age or account type.


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## rgfuller (24 Oct 2018)

I'm in my late 40s with approx. 15 years to retirement.

My Current Portfolio (all invested in managed funds):

Global Equities 33%
North American Equity 20%
Emerging Markets Equity 47%

Currently paying 25% salary with company adding 10%. Pension pot is currently 5 times my annual salary. When I get to 50 I'll increase to 30% salary contributions and at 55 I'll go to 35% contributions.
All new contributions are going into the Emerging Markets Equity, so this % will continue to rise.


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## gnf_ireland (24 Oct 2018)

Thanks for the clarifications @SBarrett


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## gnf_ireland (24 Oct 2018)

Sarenco said:


> I consider somebody who is investing in equities through a pension vehicle, while simultaneously carrying a mortgage, to have leveraged exposure to both property and equities. That's an exposure in excess of 100% to those risk assets. I think that's entirely appropriate for a young investor with a long investment horizon but may not so appropriate for an older investor that is nearing retirement.


This makes perfect sense as someone approaches retirement, and is back to the concept of whether the pension also needs to fund rent/mortgage payments.
I am assuming the vast majority of younger investors (and in most cases below ~50) will have a mortgage in parallel with a pension fund



Sarenco said:


> t's really not at all uncommon for folks that are advanced in their working lives to own a mortgage-free house


Its likely this age is rising for the population in general. 25/30 (and beyond) year mortgages are more common now than 20 years ago, and people are staying work later based on longer educational windows. Add to this the higher house prices and deposit requirements, and its likely most first time buyers are now in their 30's, looking at 25-30 year mortgages. I am not sure if there are stats available on this, but it would be interesting to see



Sarenco said:


> to have substantial cash savings (perhaps as a result of an inheritance) sitting on deposit outside their pensions.


Maybe - and its likely it would be as a result of an inheritance. I am not sure how many of the pope's children [those born between say 1975-1985] would be in that boat. I guess time will tell in 10-15 years time !
I think it is difficult to compare those retiring now with those who retired 20 years ago (late 1990's) and those planning to retire in 20 years time (late 2030's). Lots of things have changed in this window, and in most cases will continue to change.



Sarenco said:


> Again, it's an investor's overall financial position that matters and I'm very wary of any catch-all "rule" based on age or account type.


I accept this, where they are material assets outside the pension fund. Where there are not, or its likely the assets outside the pension fund will be spent before retirement, then they are of a lessor importance


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## gnf_ireland (24 Oct 2018)

rgfuller said:


> All new contributions are going into the Emerging Markets Equity, so this % will continue to rise.


Any particular reason you are so heavily invested in Emerging Markets? What triggered this alignment ? 
I am curious as to what people use to trigger changes in pension investment strategies... 



rgfuller said:


> Currently paying 25% salary with company adding 10%. Pension pot is currently 5 times my annual salary. When I get to 50 I'll increase to 30% salary contributions and at 55 I'll go to 35% contributions.


This is a serious pension contribution, so well done for being in that position to do so! 
What % of your salary are you hoping to have in retirement? 
If for example you were to retire at 60, you effectively take 65% of your current salary as wages when working (100% less 35% contribution)
Are you aiming to maintain around this level in retirement, given the high contributions? Or is it just a case of building as big a pension pot as you can afford?


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## Sarenco (24 Oct 2018)

@gnf_ireland 

I don’t think it’s wise to make assumptions regarding any individual’s overall financial position and to determine allocations accordingly.

That’s really my main point - it’s called personal finance for a reason.


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## gnf_ireland (24 Oct 2018)

Sarenco said:


> I don’t think it’s wise to make assumptions regarding any individual’s overall financial position and to determine allocations accordingly.
> That’s really my main point - it’s called personal finance for a reason.


I fully accept everyone's individual financial situation is different. 
This is no different to say mortgage applications or other big financial decisions.

However, I was hoping that there would be some level of benchmarks/guidelines around this to allow people gauge where they are against others. Similar to the guidelines that borrowing > 3.5 times salary is not good or borrowing above 80% loan to value is poor !

The concept of 'put into a pension what you can afford' is very difficult for most people to work with !


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## Gordon Gekko (24 Oct 2018)

Sarenco said:


> A 40-year old with, say, €350k in a pension vehicle and a mortgage-free house has a completely different risk profile to somebody of the same age with a similar sized pension pot that is carrying a €750k mortgage



Sarenco,

That is not what you said. Now you are moving the goalposts and talking about how unwise it can be to be contributing to a pension whilst carrying high levels of debt. That is a red herring; it was never mentioned and it is not the point you made or the point I highlighted.

Both you and I were talking about a scenario where the €350k is already in a pension structure. In terms of the asset allocation for that €350k, and assuming a >20 year time horizon, the person’s debt profile is not relevant.


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## rgfuller (24 Oct 2018)

gnf_ireland said:


> Any particular reason you are so heavily invested in Emerging Markets? What triggered this alignment ?
> I am curious as to what people use to trigger changes in pension investment strategies...



I've felt Emerging markets have presented some of the best overall growth over longer periods, so I prefer this while it is still a long while before retirement.
Once I get to a potential 5 years before the earliest date I could retire I'll review the 'global' situation and potentially move it into less risky and lower cost funds.



gnf_ireland said:


> What % of your salary are you hoping to have in retirement?
> If for example you were to retire at 60, you effectively take 65% of your current salary as wages when working (100% less 35% contribution)
> Are you aiming to maintain around this level in retirement, given the high contributions? Or is it just a case of building as big a pension pot as you can afford?



My main aim is to build as big a pot as possible taking the maximum tax advantage available now, given I can afford the maximum contributions.
Building as large a pot as possible, opens up the possibility to retire before the mandatory age without it having an impact on lifestyle.


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## Sarenco (24 Oct 2018)

Gordon Gekko said:


> That is not what you said


Sorry, I'm confused - are you saying the quoted text is not what I wrote?  Or are you arguing that a leveraged investor has the same risk profile as an unleveraged investor?


Gordon Gekko said:


> talking about how unwise it can be to be contributing to a pension whilst carrying high levels of debt


Except that I didn't make that argument.  On the contrary, I explicitly said that I was not arguing that it was inappropriate to contribute to a pension while carrying a mortgage.

Wiith respect, you seem to be very anxious to vigorously attack points that I never made.


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## ivannomonet (24 Oct 2018)

I'm 53 with 11 years to go before I'd have to leave my current company. Currently contributing 6% while employer contributes 8%.
Current pot value is 3 times annual salary. 100% international equities for the moment.


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## gnf_ireland (24 Oct 2018)

rgfuller said:


> My main aim is to build as big a pot as possible taking the maximum tax advantage available now, given I can afford the maximum contributions.
> 
> Building as large a pot as possible, opens up the possibility to retire before the mandatory age without it having an impact on lifestyle.


Thanks @rgfuller for your explanation and the science (or lack thereof) in your funding decisions. It makes perfect sense to maximise your contributions while you can afford to, and especially if it does not impact your current lifestyle.
I guess the challenge for most, including myself, is how to balance the decision on what level to contribute given finite resources. Financial decisions always have to be made, and if someone is to increase their pension contribution, its likely something else will take a direct hit. The challenge is working this trade off between current sacrifice and future benefits !


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## Gordon Gekko (24 Oct 2018)

gnf ireland,

I’ve always felt that the “use it or lose it” nature of tax relief is huge.

If I have the choice to put €10k into my pension now or pay €10k off my mortgage, I have to look at it in the context that I have one shot at that €10k and could be forgoing €40k in my pension at retirement (based on a 7% return over 20 years). And the thing with mortgages is that they tend to get paid off anyway. What is the point of being mortgage free 8 years early when the tax rules mean that you can’t backfund your pension with the excess cashflow at that point?

Gordon


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## Gordon Gekko (24 Oct 2018)

@Sarenco,

You suggested that someone’s approach in respect of a €350k pension fund with a 20 year time horizon should depend on his/her debt profile.

His/her debt profile is not relevant; subject to the behavioural piece, he/she should be 100% in equities. The debt is irrelevant as the money’s already locked away.


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## Sarenco (24 Oct 2018)

Gordon Gekko said:


> You suggested that someone’s approach in respect of a €350k pension fund with a 20 year time horizon should depend on his/her debt profile.


No Gordon, I didn't.  You may well have mistakenly read that into my comment but it was neither stated nor implied.


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## Gordon Gekko (24 Oct 2018)

Sarenco said:


> No Gordon, I didn't.  You may well have mistakenly read that into my comment but it was neither stated nor implied.



No Sarenco, you’re doing your usual. Posting something and then moving the goalposts. A well trodden path. I’m well aware of what you posted.


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## Sarenco (24 Oct 2018)

Well Gordon this is pretty easy to resolve - if I ever said what you are suggesting (or used words to that effect) you should have no problem producing an appropriate quote.


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## Gordon Gekko (24 Oct 2018)

Sarenco said:


> Well Gordon this is pretty easy to resolve - if I ever said what you are suggesting (or used words to that effect) you should have no problem producing an appropriate quote.



I’ve already provided it, but you know that, hence your attempts at deflection.


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## Sarenco (24 Oct 2018)

No attempt at deflection Gordon.

You quoted me saying that two investors that were otherwise in an identical financial position, save that one was carrying material debt, had very different risk profiles.  I wouldn’t have thought that was a controversial statement.

However, you appear to think that I said that a long-term investor’s asset allocation within their pension was dependent on their debt profile.

That’s not what I said and that was not the obvious inference to be drawn from the words that I used.  I actually went out of my way to explicitly say that it may well be appropriate for a young investor to have a leveraged position in risk assets.

I’m sorry if you misinterpreted my post but it’s mildly irritating to be attacked for something I never actually said or implied.


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## RichInSpirit (24 Oct 2018)

I understand your point of view Sarenco, I think. I looked at paying into a pension lately, but I also have some debt at 7% as well as mortgage debt at a much lower percentage but much larger amount.
Paying off the debt as quickly as possible makes more sense in my situation. Paying into a pension would reduce my debt servicing ability. As you say paying into the pension would make me more leveraged even though a pension is a worthwhile endeavour. I do have a miniscule pension from years ago that i'm not paying into, but is still working away on it's own.


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## Sarenco (24 Oct 2018)

Well I think you should prioritise paying off expensive personal debt ahead of making further pension contributions but that’s a slightly different issue.


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## gnf_ireland (24 Oct 2018)

Gordon Gekko said:


> If I have the choice to put €10k into my pension now or pay €10k off my mortgage, I have to look at it in the context that I have one shot at that €10k and could be forgoing €40k in my pension at retirement (based on a 7% return over 20 years).


@Gordon Gekko do I read into that statement that you are working on the basis of roughly 7% real return from your pension fund per annum on average?



Gordon Gekko said:


> And the thing with mortgages is that they tend to get paid off anyway. What is the point of being mortgage free 8 years early when the tax rules mean that you can’t backfund your pension with the excess cashflow at that point?


Fair enough, but I guess this is the overall balance between carrying debt and investing in pension funds. There was a while when most of our mortgages were floating around 4.5%, and that would equate to roughly 9% pre tax return. The compounding of a mortgage at this rate of interest can be difficult as well, especially if people have over extended.

But yes, I do get your point on the tax relief on pensions and does make sense.


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## Gordon Gekko (25 Oct 2018)

Hi gnf ireland,

No, not at all...I was just using 7% because of its simplicity in terms of compounding.

In my planning, I have always used 4.5% real and net of fees.

Gordon


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## gnf_ireland (25 Oct 2018)

Gordon Gekko said:


> In my planning, I have always used 4.5% real and net of fees.


Thanks - this gives me something to work off now  even if i have to up my risk levels to achieve this.


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## Ndiddy (25 Oct 2018)

39, 7.5 annual salary saved in pension.  20% Employee, 15% Employer.  Was until the summer, 100% equities and now 80% IL Dev World Index(50% FTSE World/50% Euro) and 20% IL Bonds...not too many choices with company plan.

Partner is 40, 4.5 annual salary in pension. 25% EE, 12%ER.  Also 80/20 split as of the summer with company plan with IL.

Pretty much make full AVCs then pay crèche for 2 wee ones, mortgage, a bit for rainy day and live off what's left.


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## gnf_ireland (25 Oct 2018)

Ndiddy said:


> Pretty much make full AVCs then pay crèche for 2 wee ones, mortgage, a bit for rainy day and live off what's left.


Impressive contributions during what is a very expensive period of childcare !
35-37% contributions should ensure a very comfortable retirement for you both ...


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## Duke of Marmalade (25 Oct 2018)

Gordon Gekko said:
			
		

> (...based on a 7% return over 20 years...)


You should mortgage and remortgage to the hilt and invest it in whatever way is most tax efficient.


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## gnf_ireland (30 Oct 2018)

Thanks everyone for the detail - made interesting reading !


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## Truffade (3 Nov 2018)

A question that I often ponder: does the 25% (200k) limit on tax free lump sum have a bearing on anyone's pension planning?

I'm 44 now and should hit that 800k number for pension pot size within 8-10 years max. Assume mortgage paid off and no other debt.

Is anyone using that 800k barrier to drive future plans? For myself, I would quite like to crystallise my pension in my early 50s when I hit the 800k, quit my (high-paying, high stress) career and find new work of my choice without too much concern as to the salary attached. Probably part-time.

Anyone else thinking along these lines? (Or am I the only nutter out there!?)


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## notthatkeen (3 Nov 2018)

In a similar situation: 39, well paying but high-stress job, hoping to be mortgage free in a few years and able to retire or just move to something more rewarding/lower stress by 50 (which is also when I can access my pension).
I'm still working a lot of this out*, but there is a huge internet community around this stuff (the key acronym is FIRE (financial independence, retire early) and there is a vast amount of info on both the lifestyle and financial side. For an excellent example of the latter, search for "The Ultimate Guide to Safe Withdrawal Rates" on the earlyretirementnow site (sorry I can't post links).


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## Steven Barrett (6 Nov 2018)

Truffade said:


> A question that I often ponder: does the 25% (200k) limit on tax free lump sum have a bearing on anyone's pension planning?
> 
> I'm 44 now and should hit that 800k number for pension pot size within 8-10 years max. Assume mortgage paid off and no other debt.
> 
> ...





notthatkeen said:


> In a similar situation: 39, well paying but high-stress job, hoping to be mortgage free in a few years and able to retire or just move to something more rewarding/lower stress by 50 (which is also when I can access my pension).
> I'm still working a lot of this out*, but there is a huge internet community around this stuff (the key acronym is FIRE (financial independence, retire early) and there is a vast amount of info on both the lifestyle and financial side. For an excellent example of the latter, search for "The Ultimate Guide to Safe Withdrawal Rates" on the earlyretirementnow site (sorry I can't post links).




Don't let the tail wag the dog. In other words, don't see having to pay tax (of 20%) on some of the lump sum as the point in which you stop funding for your pension. The cost of your lifestyle (especially if drawing down early) may mean you need a pension of €1.5m. What are you going to do then? Carry on working? Have a less enjoyable lifestyle? 

There are lots of people in well paid but high demanding jobs. We all know that there isn't going to be gold watch at the end of your career for 40 years service. So you need to put the structures in place now so that you have that choice of leaving early and taking a job that pays less but with less stress. If you aren't organised and don't plan, you will be stuck in a job that you begin to find too demanding but you need the income that comes with it. 


Steven 
www.bluewaterfp.ie


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## moneymakeover (10 Nov 2018)

Going back to the original question of allocation

I would be worried as evidenced by the recent correction that the global equities are "toppy" these days. Particularly with the rising US rates and other business indicators.

Therefore while previously 100% global equities I recently moved a portion to cautious equities and some to cash.


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## Marc (11 Nov 2018)

I'm curious. What are cautious equites?

If you can lose 100% of your investment how does that meet the definition of cautious?


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## moneymakeover (11 Nov 2018)

There is a fund in my list of Irish Life funds into which I can switch and it's called

"Cautious equities"

It's composed of equities, bonds, cash, property.


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## thos (14 Nov 2018)

Couple of questions
1 - For those quoting "x times salary", is there a benchmark you are following? I've seen references elsewhere to 1 times salary at 30, 3 times at 40, 6 times by 50?
2 - For those quoting distributions / breakdowns - are these something you are controlling individually? I'm with Irish Life and have a list of about 6 funds available, and all have various breakdowns within them, but not direct control. Is this the general approach of a breakdown by fund, or do other providers allow a more granular breakdown?


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## moneymakeover (14 Nov 2018)

What do you mean not direct control?

You mean you have to request any changes?


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## Ndiddy (14 Nov 2018)

Thos

I quoted salary to follow the previous examples but my goal is to get to 25 times my annual expenses- what my family need to live on modestly but comfortably which is a totally different number.   Creche fees for 2 pretty much wipe out any significant saving outside of the pension, so we put in the max allowable for tax relief and live off the rest.

For your second question, are your 6 choices MAPS or a fund made of other funds?  My company plan has and option for that and the option to choose my own funds, albeit from a limited choice of IL funds.  I DIY and for now choose 80% in Global equities( which is 100% stock) and 20% in Euro Government Bond fund.


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## thos (14 Nov 2018)

Ndiddy said:


> Thos
> 
> I quoted salary to follow the previous examples but my goal is to get to 25 times my annual expenses- what my family need to live on modestly but comfortably which is a totally different number.   Creche fees for 2 pretty much wipe out any significant saving outside of the pension, so we put in the max allowable for tax relief and live off the rest.
> 
> For your second question, are your 6 choices MAPS or a fund made of other funds?  My company plan has and option for that and the option to choose my own funds, albeit from a limited choice of IL funds.  I DIY and for now choose 80% in Global equities( which is 100% stock) and 20% in Euro Government Bond fund.


Thanks for the reply.

I have the PLS - Personal Lifecycle Strategy option, or I have a list of 6 or so funds, varying risk levels, all EMPOWER branded Cautious / Growth / High Growth, look to be similar to MAPS alright, and are mostly multi-asset, with 1 'World Equity Fund' available.



moneymakeover said:


> What do you mean not direct control?
> 
> You mean you have to request any changes?


The question was more about direct control of the distribution. So I can pick a fund with 70% shares, 20% bonds, 10% property, or another with different but still 'fixed' distribution, but not decided to pick my own mix.
I use Irish Life Pension Planet, which has the feature & functionality to switch, but for some reason my company don't allow, so needs to be written submission to switch funds.


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## moneymakeover (14 Nov 2018)

Thos
I'm similar

Currently distributed across
Empower Cash
Empower cautious
Empower world equity partially hedged

The list of funds seems to allow a mix of equity / cash / property / bonds as required


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## Don Gately (29 Nov 2018)

Ok hi all, new here but curious about pensions, currently 16% of salary, roughly half by employer. 2/3rds equities 1/3rd Irish propertys REIT with aviva. Pension pot of €320k running for the past 20 yrs . I am 45. Any comments on this?


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## Gordon Gekko (29 Nov 2018)

I would question the wisdom of the allocation to Irish property. Most of us are already over exposed via our homes and if you didn’t live in Ireland, would you still invest here?


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## moneymakeover (30 Nov 2018)

@Don Gately 

That is significant pension, well done

I have asked about this before.. What kind of advice do you get when choosing how to allocate?

As the pension pot gets big it requires more and more responsibility


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## Don Gately (30 Nov 2018)

Thanks lads for the replies

to answer Gordon: really the broker advised me about the REIT and the returns though reducing have been around 12% per annum there. It is all commercial in Dublin so probably peaking.
I think it is now around half that so maybe it's time to move?

Moneymakeover:  I am the trustee of our pension fund at work and ask the broker for advice as well as using the noodle myself, we would have a good proportion of the overall fund in lower risk/strategic assets with all the new money going into higher risk Merrion fund.

Each individual can choose to put their pensions elsewhere if they want within the fund.

We are looking at moving the trustee to an Aviva recommended one as really it is getting too big now for me to be responsible for.

Where would you recommend me to move that 1/3rd that is currently in Irish property reit?

Thanks


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