# A.V.C. Irish Life



## nedziko (23 Jan 2009)

Hello,
First time posting. quick query, i have been doing an a.v.c. with cornmarket (im in public sector) for last three years. ive put approx 3000 in which is now worth only about 1000 due to whats happened to shares of late.
Should i continue paying into a.v.c or is it just throwing good money after bad? should i pause my contributions until things stabelise? 
Any help would be greatly appreciated


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## Dave Vanian (23 Jan 2009)

Do a Google search _Cornmarket Site:Askaboutmoney.com_ 

You'll find from the results that there are many threads here explaining how Cornmarket's AVC product is expensive compared with other PRSA AVC alternatives.  I'd switch to a cheaper version for that reason.


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## oysterman (24 Jan 2009)

Have you considered notional service purchase? Will you have full service at your normal retirement age?


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## nedziko (24 Jan 2009)

notional service is not an option as i was doing the avc to supplement early retirement (when the day arrives). notional service cannot be purchased to satisfy early retirement. Ive already set up with cornmarket and paid the expensive set up fees, so the cost of cornmarket is mute.
i'm just wondering should i stop/pause my avc until the markets sort themselves out or should i continue as i am? am i throwing money away at present putting money into avc's in such a volatile market? cheers for any help


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## PaddyBloggit (24 Jan 2009)

I'm in exactly the same boat as you nedziko.

I'm unsure about how to proceed and this is despite meeting with one of Cornmarket's adviser's in November.

With changes happening by the day I'm thinking of getting him out again. The problem is they push increasing rather than decreasing contributions. If I could find an 'independent' financial adviser.

I am considering ... stopping/reducing/pausing etc. but as yet I don't have enough info to make an informed decision.

Notional service seems to cost an arm and a leg if I was to consider it. Only problem is the earliest I could go would then be 60. AVC's at the moment (?) is aiming to retire me at 57.


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## upport (24 Jan 2009)

Alot depends on your personal circumstances,if its an affordability issuse, then reduce or freeze the contribution.If it's market volatility,then switch to a Cash Fund.These alterations only require your written instruction to Insurance Co. head office.Immediate benefit of increasing contribution is tax relief and future benefit is a larger fund.If you meet with an Advisor, ask for a Financial Review and in particular review your attitude to risk.Yes the Advisor will try to sell,he's trying to keep his job.


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## mjb (26 Jan 2009)

You have already lost money so you could consider leaving your fund in the risky shares option and hope that it will recover in time. If you don,t you are accepting a large loss. You could then switch your future contributions into a guaranteed fund with Irish Life. where your contributions would at least not lose any money and move again if you wanted in the future. Or you could switch future contributions to a cheaper provider. Rem that for every 100 euro you contribute only about 94 is lodged as the balance is charges.


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## oysterman (26 Jan 2009)

nedziko said:


> Ive already set up with cornmarket and paid the expensive set up fees, so the cost of cornmarket is mute.


No.

You've paid a start up cost. It was very expensive. Perhaps it was excessive.

The fact that you have paid it should not be a factor in deciding what to do in the future.

Every €100 you pay now loses you €5 off the top. Cornmarket/Irish Life help themselves to it.

There are plenty of pension products out there (PRSA AVCs through execution-only brokers, for example - there are plenty of threads on AAM) where the entire €100 goes into your fund.

You start up payment is a sunk cost. It's gone. Forget about it.

Now decide what to do with your future pension contributions.


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## PaddyBloggit (26 Jan 2009)

In relation to the above if anybody know a 100% independent financial adviser in the Munster I'd appreciate a PM ..... thanks!


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## mad m (2 Feb 2009)

How much is the start up fund of this AVC Irish life


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## mad m (2 Feb 2009)

I've been paying into an Avc with irish life now for 4-5years through my job with Dublin city council.....Whats my best option to do now?


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## Sambuca (5 Feb 2009)

The only up side to the the funds being down across the board is that your monthly premium is buting up more units and eventually when the market does bounce the more units you have the greater impact it has on your value. So if you have at least 10 years to go before the big retirement I would keep it going.

The only problem is when this bounce is going to happen......a long term view is about 30 years now???


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## mad m (5 Feb 2009)

Well hopefully if I still have a job, I will have 28 years to go before I retire at 65...So what your saying is maybe pause or stop it altogether? Can I ask these (Irish life) to put it into a PRSA? or is this the same thing....Pensions are mind boggling.


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## Eggball (8 Feb 2009)

Sambuca said:


> The only up side to the the funds being down across the board is that your monthly premium is buting up more units and eventually when the market does bounce the more units you have the greater impact it has on your value. So if you have at least 10 years to go before the big retirement I would keep it going.
> 
> The only problem is when this bounce is going to happen......a long term view is about 30 years now???




I've been wondering about this myself.  I've paid something like 22,000 euro into the Irish Life Consensus Fund and it's value is now standing at barely 16,000.  With wage cuts and increased taxes in the offing I've been wondering whether or not to yank some or all of my contributions and keep my cash on the hip.  However, since I've got about 20 years to retirement I'm going to take a chance and keep pouring my contributions in.  With two decades for the markets to recover, I reckon the smarter move would be to keep buying up fund units at today's prices, dig in and wait.  If the recovery comes, my pot should greatly increase in value over a relatively short period.  However, if and when it does, I intend to start transferring some of it into cash funds.  Consensus automatically starts to transfer your money into cash at about five years out from retirement, but I'm not going to wait that long; if I can get a good return within the next ten years, I'll start moving it myself, before the next recession hits.


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## PaddyBloggit (8 Feb 2009)

I'm stopping my AVC contributions this week .... I'm 25% down in less than 18 months. It's costing me a fortune each year .... I'd be better burying the cash!


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## truthseeker (13 Feb 2009)

Sambuca said:


> The only up side to the the funds being down across the board is that your monthly premium is buting up more units and eventually when the market does bounce the more units you have the greater impact it has on your value. So if you have at least 10 years to go before the big retirement I would keep it going.
> 
> The only problem is when this bounce is going to happen......a long term view is about 30 years now???


 
Im inclined to agree with this point of view - a lot of people in my job are panicking and stopping AVC contributions. I feel if I stop that I will be locking in my loss and not giving the fund a chance to recover.

I can afford the AVCs. I have approx 30 years left before retirement.

I dont think that you can judge the performance of a long term fund over 1 bad year or 18 months?

Any other views?


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## Eggball (13 Feb 2009)

I agree, Truthseeker.  If you can afford to keep going, keep going.  The way things stand now, I'm not sure if there is any such thing as a safe harbour for your money anyway, so if you've got time to wait for a recovery, use it.


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## mad m (16 Feb 2009)

I was going to stop them or atleast put a pause on them, but considering all things I might drop the contributions down to the bare minimum now...


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## PaddyBloggit (17 Feb 2009)

I looked into this .... If I stopped my AVC contributions my actual gain in my salary would be minimal as I'd have lost the remainder to tax.

As it stands my fund is down but it's still much higher than what I have personally contributed . I look at the loss as being covered by the tax man. If I didn't put the money into AVC's I'd probably have spent it on day to day stuff.

I'm going to continue with mine .... and review it again it the conditions change  e.g. tax breaks


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## truthseeker (17 Feb 2009)

PaddyBloggit said:


> I looked into this .... If I stopped my AVC contributions my actual gain in my salary would be minimal as I'd have lost the remainder to tax.
> 
> As it stands my fund is down but it's still much higher than what I have personally contributed . I look at the loss as being covered by the tax man. If I didn't put the money into AVC's I'd probably have spent it on day to day stuff.
> 
> I'm going to continue with mine .... and review it again it the conditions change e.g. tax breaks


 
I agree - and dont forget that the fund wont get a chance to recover if you stop making contributions. You are still availing of the tax break with this and while the stock markets are down its an opportunity to buy more for the money than when they are up.


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