# should I pay into avc's



## random10 (2 Mar 2015)

I'm hoping to get advice here. Myself and my husband are both teachers and had a rep from cornmarket visit recently. She talked us through avcs but want other opinions as I'm clueless. 

Me: retiring at 55 I'd get lump sum of 81k and pension of 27k 

Retiring at 60: lump sum 96k 

Husband: retiring at 57 lump sum 97k salary 32k

Retiring at 62 lump sum 114k.

It was suggested to pay into avc's to make up shortfall of lump sums 

Doubt I'll be able to retire at 55 for a few reasons I'm 31 now and have a 30 year mortgage so I'd still have 6 years left. Also no kids yet but plan to so would have to fund their college courses too prob. So what would you do in our circumstances. Rep explained that you are trying to beat inflation. I am really clueless so many people sat avoid avcs but want to be ready for retirement


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## oysterman (3 Mar 2015)

These questions are unanswerable but I know what I'd do in your circumstances:

Build up savings now to fund the expense involved in having children.
Build up savings for future education costs for any children you may have.
Work out a plan to shorten the term of your mortgage to coincide with the age at which you might target retirement.
Then, and only then, consider starting an AVC plan.
The truth is there are very few couples who couldn't retire comfortably on a current value aggregate pension of €60k provided their kids are off the payroll and the mortgage is paid off. Ignore the blather you get from pension salesmen - both of you have very good pensions already.


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## Gerry Canning (3 Mar 2015)

Random 10,

Strongly suggest get a trusted pension/investment advisor to go through your life figures.


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## random10 (3 Mar 2015)

Thanks for feedback sounds like a better plan. If we had mortgage paid off and savings for college education pension wouldn't be such a worry


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## thedaddyman (3 Mar 2015)

If you both retired at 55/7 you'd have a combined lump sum of 177k- I presume that would pay off the mortgage with a bit left over?

Can you afford right now to pay off more of the mortgage then the normal monthly payments, even €100 a month will make a dent over 20-30 years


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## Steven Barrett (3 Mar 2015)

Before you make a decision, look into the cost of buying back years. They are incredibly good value. 

I'm surprised the Cornmarket rep didn't advise you on it.  It was something that they constantly ignored while being filmed undercover by the Prime time team a few years back. 


Steven
www.bluewaterfp.ie


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## Gordon Gekko (3 Mar 2015)

The misselling of pensions over the years has totally discredited them. Done properly, they're superb. But so many people have been ripped off in relation to fees or put into bogey investments.

Done properly, they're a wealth creation tool not just for the pensioner but for the pensioner's family. This is why an enlightened advisor (like Steven) will prosper.

I have no connection with Steven...I just like the cut of his jib.


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## Steven Barrett (3 Mar 2015)

Gordon Gekko said:


> This is why an enlightened advisor (like Steven) will prosper.
> 
> I have no connection with Steven...I just like the cut of his jib.



Thank you


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## oysterman (5 Mar 2015)

SBarrett said:


> Before you make a decision, look into the cost of buying back years. They are incredibly good value.
> 
> I'm surprised the Cornmarket rep didn't advise you on it.  It was something that they constantly ignored while being filmed undercover by the Prime time team a few years back.
> 
> ...



One thing to look out for here is that the OP was being advised in respect of *maximising (currently tax-free) lump-sum*. Buying back years is attractive but not really if the intention of the exercise is only to max the lump-sum...you would have to buy the ongoing pension as well if buying back years: the benefit of buying both is not as conclusive given that there may be a fairly tax-neutral outcome.


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## Steven Barrett (5 Mar 2015)

oysterman said:


> One thing to look out for here is that the OP was being advised in respect of *maximising (currently tax-free) lump-sum*. Buying back years is attractive but not really if the intention of the exercise is only to max the lump-sum...you would have to buy the ongoing pension as well if buying back years: the benefit of buying both is not as conclusive given that there may be a fairly tax-neutral outcome.



That's it exactly. Who was leading the conversation, the OP or the Cornmarket rep? From what I took from the OP, they were told how to maximise their tax free lump sum which can be done through AVC's and nothing else. 

The OP should look at all the options before making a decision. 


Steven
www.bluewaterfp.ie


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