# AVC question



## deep pockets (6 Feb 2013)

Hi to all, I'm a new user and financials dimwit but need some advice. Sheepishly I have putting money in a company avc scheme for a good while. The DB scheme has been severely underfunded and now benefits under a section 50 application have been halved. I have 120,000k in the avc but with a salary of 50k, on retirement (using today's values as a guide) I can only take 75k tax free on retirement. An annuity or ARF (TBH I don't really know what this is exactly) will have to bought with the balance: I'm guessing the 45/50k left over wont buy much. Should I freeze the AVC now and look for an alt saving vehicle. I am 52 now and pension at today's figures, will only be about 100 euro after 40 years plus state pension - if it's still there. I know there is the tax benefit now but even so the excess over the years til I retire won't buy much. Am I right? And yes I am going to seek the help of an advisor shortly but thought a post here might be of benefit - to me and others like me. Thanks in advance.


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## deep pockets (20 Feb 2013)

*AVC advice needed*



deep pockets said:


> Hi to all, I'm a new user and financials dimwit but need some advice. Sheepishly I have putting money in a company avc scheme for a good while. The DB scheme has been severely underfunded and now benefits under a section 50 application have been halved. I have 120,000k in the avc but with a salary of 50k, on retirement (using today's values as a guide) I can only take 75k tax free on retirement. An annuity or ARF (TBH I don't really know what this is exactly) will have to bought with the balance: I'm guessing the 45/50k left over wont buy much. Should I freeze the AVC now and look for an alt saving vehicle. I am 52 now and pension at today's figures, will only be about 100 euro after 40 years plus state pension - if it's still there. I know there is the tax benefit now but even so the excess over the years til I retire won't buy much. Am I right? And yes I am going to seek the help of an advisor shortly but thought a post here might be of benefit - to me and others like me. Thanks in advance.


Can anybody help?


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## ClearFinance (28 Feb 2013)

Hi Deep Pockets,

Your avc is always a good choice especially if your db scheme is under funded. You get tax relief now as opposed to saving money, with savings you dont get the benefit of tax relief. Will you be paying into the DB scheme now for the next few years? When you say a pension in today's figures is only 100 euro do you mean a month or a week? is that based on the avc only or the whole DB and avc combined.??


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## ClearFinance (28 Feb 2013)

Sorry, i just need a bit more information so I can give you a clearer picture, you do have a good few years to go to retirement so it can be salbaged to some extent with the right tactics. Thanks


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## Palerider (28 Feb 2013)

Well done on doing the AVC, you have an impressive amount tucked away.

AVC's are tax advantageous so worth doing, there will come a point where you have to decide whether or not to keep funding these, your current financial situations, have you mortgages or loans o/s, your further job prospects and other lifestyle considerations. If you leave your current employer it is likely that the AVC will close off to new contributions if this was done alongside your employees pension fund so bear that in mind.

I would keep it going and also very important that you monitor when that money is invested, I look at mine quarterly and can move funds about, you do not want a situation of your avc fund going well for five years before drawdown and collapse in the final year following some world calamity on the stock markets, prudence is important in your situation, it is your future.


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## deep pockets (5 Mar 2013)

ClearFinance:
Thanks for the reply. Yes I've about 15 years in theory to retirement and the 100 (it's slightly less than that) is weekly at today's figures and is based on the DB fund only.

Palerider:
Yes it seems a decent amount - I've contributed for years - but I'm worried about the buying of an annuity with what is left after I take the 1.5 years' salary tax free. As I've said I sheepishly just put money into the AVC and am only now trying to understand the implications as I trundle nearer to retirement. Yes I have a mortgate (currently about 1k a month) and a youngster away from home in college - another expense but it's part of the parental gig. I can just about keep it going but wonder are annuities value for money or should I call a halt and but the money 'under the bed' for later?. Thanks again for the replies. The beauty about this information is it will help prior to meeting with a financial advisor.
regards to all


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