Hold on payments to PRSA

[rooktobishop]

I have 28 years left on my pension.

The pension is performing very poorly at present.

Would it be wise to stop paying into pension while the markets are in turmoil and start again when credit issues are shown to be stabilising.

 

[NHG]

In roughly same position, but I am looking at it that at present I am still purchasing while pirces are low.

 

[GSheehy]

It could also be argued that now is the time to increase payments (subject to revenue maxima) for the very reason that NHG has outlined.

If you are reviewing your pension, you should also review the charges that apply to the plan so that you can establish if these are dragging on the overall 'performance' of the pension.

 

[Conan]

Apart from the purchasing assets whilst they are potentially "cheap" after recent falls, for a 28 year old you will certainly experience similar volatility over the next 30 or so years before you have to draw on the fund.


So focussing on current volatility makes little sense. Pension investing is the ultimate "long term investment". Human nature tends to lead towards:

• selling or stopping investing when markets fall and
• investing when markets have risen

In the long term, the exact opposite strategy is the one that pays off.
At age 28 you need to keep funding, focussing more on Equity holdings (long term tendancy to outperform other assets) and frankly turn a blind eye to short term volatility.

Yes, when you get closer to retirement (in the last 5 to 7 years) you need to focus asset allocation, de-risking and moving more towards lower risk strategies. But at 28, I suggest now it not the time for a conservative approach.

 

[ClubMan]

Would it be wise to stop paying into pension while the markets are in turmoil and start again when credit issues are shown to be stabilising.

Timing the market is a mug's game. For a pension which is generally an investment over decades you would most likely be better continuing to make contributions regularly (e.g. monthly) regardless of prevailing market conditions rather than stopping and starting in response to short term volatility.

 

[willbee]

I agree totally with GSheehy, I was 10 years putting a monthly amount into the Irish Life fund, 'Secure Performance', through Marsh. In that time, it has grown from €9066, to €9900. When I added up all the fees, that Marsh charged over the years it amounted to alot of money that could and should have been put into my pension fund instead. I have frozen that fund and am now putting my monthly contributions into an Eagle Star PRSA with nil commision. I suggest you do the maths and don't neccessarily blame the fund.