# Increase pension contributions? ETF investment? Accumulate deposit a/c?



## The Edge (29 Sep 2009)

Age: 36
Spouse’s/Partner's age: n/a

Annual gross income from employment or profession: €90k approx
Annual gross income of spouse: n/a

Type of employment: e.g. Civil Servant, self-employed: commercial semi-state

In general are you:
(a) spending more than you earn, or
(b) saving?

(b) 

Rough estimate of value of home €180k
Amount outstanding on your mortgage: €155k
What interest rate are you paying? 3.25% Tracker

Other borrowings – car loans/personal loans etc: none

Do you pay off your full credit card balance each month? Usually, yes. 
If not, what is the balance on your credit card? Currently nil

Savings and investments: Approx €40k in various deposit accounts.

Do you have a pension scheme? Yes: but only around €20k approx accumulated thus far.

Do you own any investment or other property? No

Ages of children: n/a

Life insurance: Yes, with mortgage


*What specific question do you have or what issues are of concern to you? *

My current pension fund is clearly not adequate, as a result of having only been contributing into a scheme for around 5 years in total; therefore I am contemplating making AVC's. 

Having said that, having no dependents and frankly not planning to either, I doubt the advantages of even having a pension (I assume funds aren't accessible until reaching 65 - how do I even know I'll live that long?) In general I am looking for recommendations as to strategy for medium to long term savings accumulation, should I bump up pension contributions or should I just give up on the pension altogether and increase monthly S.O. to my deposit account, or alternatively invest in shares via an ETF? Someone mentioned BES funds to me - is this a good tax efficient form of investment and what safeguards are available/how risky is it?

EDIT: Should mention that the long term plan is to trade the markets full time from home, currently am still a good bit away from being proficient enough to be able to do that, so emphasis in the near term in basically accumulating a nest egg to fund trading and/or put by 'for a rainy day'.


----------



## Guest116 (30 Sep 2009)

You are 36, earning 90k with no personal loans and no dependents and a low enough mortgage. I have to ask where is all your money going that you have only 40k saved? Guessing your salary has increased a lot recently because you should have an awful lot more saved. Or have you paid off a chunk of the mortgage with savings?

You should easily save 25k per year which would still give you about 3k net per month to spend on the mortgage, pension and other spending.


----------



## paddyodoors (1 Oct 2009)

agree with the above - I assume the salary is a recent increase not only your savings being so low but also the low value of your property - are you planning on trading up at some point?

In any event without a doubt in my optinion you should be making AVC's to take advantage of the top tier tax break - whack in the 20% max. this should be viewed as a dead cash until you retire -i.e.  without any access - then also start a seperate savings plan which has a shorter timeframe.

You earn pleanty of cash for the pension contributions to be forgotten about, you still have plenty of excess to save or spend on whatever you desire (if you don't much feel like hanging around the motal world after retirement). 

Paddy


----------



## goingforgold (2 Oct 2009)

I disagree with the previous two comments. You are a relatively young person with a low mortgage, are in positive equity and have a substantial sum saved in the bank. And yet people are saying you are not doing well enough. Yes you have a very good salary but there are plenty more on this forum with good salaries who are mortgaged to the hilt, have ridiculous personal loans and are in dire straights. We have to put your situation in perspective and you have a very healthy one. Consider yourself lucky!

I would try and ramp up my savings if I were you. Put these in a high interest deposit account and definitely max out your AVC's.


----------



## The Edge (2 Oct 2009)

Thank you all for your comments.



goingforgold said:


> I disagree with the previous two comments. You are a relatively young person with a low mortgage, are in positive equity and have a substantial sum saved in the bank. And yet people are saying you are not doing well enough. Yes you have a very good salary but there are plenty more on this forum with good salaries who are mortgaged to the hilt, have ridiculous personal loans and are in dire straights. We have to put your situation in perspective and you have a very healthy one. Consider yourself lucky!


 
In fairness, I think previous posters were just trying to tease out the apparent disconnect between being on €90k p.a. and only €40k saved which is a valid question to ask; I have only been on current package for last two years or so, gross income has increased by 50% approx in past five years but more importantly was not working for one of those five. Currently annualised saving would not be far off the €25k aristotle25 suggested as appropriate. I don't have a car but on the other hand spend a fair bit on taxis. I don't think my lifestyle is luxurious although there are a few areas I could economise on. 



goingforgold said:


> I would try and ramp up my savings if I were you. Put these in a high interest deposit account and definitely max out your AVC's.


 
I think this is good advice.


----------



## The Edge (2 Oct 2009)

paddyodoors said:


> also the low value of your property - are you planning on trading up at some point?


 
The value I put in is I feel the realistic price in the current market. Asking prices for similar properties are a bit  higher but we all know they are not being achieved at the moment. Would envisage trading up in maybe 2 years but would prefer to concentrate on savings first.


----------



## paddyodoors (5 Oct 2009)

goingforgold said:


> I disagree with the previous two comments. .......people are saying you are not doing well enough.


 
not sure where you read from my post that there was a statement of not doing well enough - the OP is is a great position, however in order to provide a constructive comment more info was needed on lifestyle and future expectations. A housevalue of 190k potentially suggests a future move, which would have a large impact on any advice that should be given, plus a good salary with no real outgoings, with relatively speaking small savings, could suggest other lifestyle costs we were not aware of - or as OP has confirmed a recent good pay hike. (well done on that btw)



goingforgold said:


> I would try and ramp up my savings if I were you. Put these in a high interest deposit account and definitely max out your AVC's.


 
As I had said re AVC's - but caution to the high interest account - you need to decide if this is still to be a medium to long term savings plan or a more short term one for more near term expediture e.g. trading up. If longer term then deposits accoutns are not the best option.#

Paddy


----------

