Irish Life Pension & Lifestyling

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Persia

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I have a pension with Irish Life and am 7 years to retirement.
I noted today that I am now in 2 funds

Empower Growth Fund (Risk Rating 4)
Empower Stability Fund ( Risk Rating 2)

I am being "sheperded" into low risk funds the closer I get to retirement.

I will take an ARF self administered option when i retire so the above makes no sense.

Have been looking at putting 100% into their Indexed World Equity Fund (Risk Rating 6).

And problems with this approach that I may be missing?
 
Thanks Dr S, just looking for feedback on this specifically. I have 2 other pension plus state pension plus rental income. It's really just getting feedback on my approach here with Irish Life and looking for trip hazards.
 
Perseus said:
I have a pension with Irish Life and am 7 years to retirement.
I noted today that I am now in 2 funds

Empower Growth Fund (Risk Rating 4)
Empower Stability Fund ( Risk Rating 2)

I am being "sheperded" into low risk funds the closer I get to retirement.

I will take an ARF self administered option when i retire so the above makes no sense.

Have been looking at putting 100% into their Indexed World Equity Fund (Risk Rating 6).

And problems with this approach that I may be missing?
Click to expand...
I also looked at this recently in this analysis

www.linkedin.com

I took a deep dive into some deferred occupational pensions for a client… | Marc Westlake CFP, TEP, EFP, APFS

I took a deep dive into some deferred occupational pensions for a client recently. Using analytical software I compared the risk and return characteristics of several “risk rated” strategies compared to the equivalent UCITs strategies of low cost index funds I would use for some or my clients...
www.linkedin.com www.linkedin.com
 
Thanks both. Have to wait ages between posts.

Irish Life wouldn't be my preferred choice, came with the job.

Indexed World Equity Fund- any opinions good or bad on it?
 
SquirrelChaser said:
Yeah, the middle ground is usually in many respects the best ground to stand on- i recognise that though I plan to skate around the edge myself.

The likelihood of me having a 60 year (or even 40 year) long retirement is regrettably low though...
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Same! Tbf, these guys (Jeske, Pfau, etc) are early retirement gurus.
 
Perseus said:
Indexed World Equity Fund- any opinions good or bad on it?
Click to expand...
According to the factsheet, it tracks the MSCI World Index. So it's globally diversified and is passively managed, both of which are generally considered good, all other things being equal (but of course there will be someone who will argue for an actively managed fund or avoiding shares denominated in foreign currencies, so make your own decision). It's 100% equity exposure and 75% exposed to US equities. There are other threads here about the pros and cons of high US exposure.
 
Sarenco said:
There seems to be a common view on AAM that equities will outperform fixed-income investments over any reasonable holding period.

It ain’t true…

Stocks for the long run?

It's commonly stated that stocks provide superior long-term returns to bonds. But what does "long-term" mean in this context? Over the last 20 years, the S&P500 has produced an annualised 4% return, with all dividends reinvested. That's an annualised real (after-inflation) return of less than...
www.askaboutmoney.com

And we haven’t even mentioned sequence of returns risk…
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I'm personally unconvinced that pooled funds investing in fixed income investments provide all the benefits of this asset type. I do wonder then if the charges for self directed investment in bonds would be too high.

I reasonably far from retirement (and have a small deferred DB entitlement) that I don't feel the need to look into this yet, but it's on my (very) long term to do list.
 
SquirrelChaser said:
I'm looking at this stuff for myself rather than for a client so I'm digging into a lot more detail than you could give a client during a consultation because you simply wouldn't have the time.
Click to expand...

I made this point in this post yesterday

www.linkedin.com

The U.K. regulator, the FCA’s Financial Lives survey found that only 8% of… | Marc Westlake CFP, TEP, EFP, APFS

The U.K. regulator, the FCA’s Financial Lives survey found that only 8% of UK consumers received full financial advice in 2022. Decisions on saving, investing and how to use their pension pots are critically important, and some may struggle to make the right choice for them without help. If...
www.linkedin.com www.linkedin.com

To be clear, going through the joining/leaving service options letter with an employee benefits consultant retained by your employer is not the same as taking the time to put in place a comprehensive financial plan.

youtu.be

Trust and Transparency (Introducing Everlake Episode 5)

Trust is a big issue in the financial sector. The fact is, if you don't trust your advisor, you won't act on the advice. Even worse, Ireland is perhaps the m...
youtu.be youtu.be
 
Marc said:
I made this point in this post yesterday

www.linkedin.com

The U.K. regulator, the FCA’s Financial Lives survey found that only 8% of… | Marc Westlake CFP, TEP, EFP, APFS

The U.K. regulator, the FCA’s Financial Lives survey found that only 8% of UK consumers received full financial advice in 2022. Decisions on saving, investing and how to use their pension pots are critically important, and some may struggle to make the right choice for them without help. If...
www.linkedin.com www.linkedin.com

To be clear, going through the joining/leaving service options letter with an employee benefits consultant retained by your employer is not the same as taking the time to put in place a comprehensive financial plan.

youtu.be

Trust and Transparency (Introducing Everlake Episode 5)

Trust is a big issue in the financial sector. The fact is, if you don't trust your advisor, you won't act on the advice. Even worse, Ireland is perhaps the m...
youtu.be youtu.be
Click to expand...
Some very good points very well made in that episode.

I suppose the issue for a lot of people is that they don't know what they don't know. Unknown unknowns and all that.

The assumption I would have made initially was that the person i was talking to when setting up my pension was the best person to give me advice. When I learned more i flipped to doing as much of my own research as i could. Trust lost is hard regained.
  • This isn't limited to financial planning or any other sector unfortunately. When I was doing residential conveyancing there was an appallingly poor level of competency in that bread and butter segment of the legal profession (which is far from rocket science). It (along with various other experiences) gave me a long lasting poor view of my former profession. And unfortunately that perspective has only been reinforced by my (thankfully rare) subsequent experiences when I've required a solicitor.
  • It's sadly the case that merely because someone has been doing a thing for a long time isn't if itself an indication that they do that thing well.

Good financial advice is hard to find for the average person I feel. Mainly because most people (like with solicitors) simply can't differentiate between good, bad and indifferent- at best they can assess using the quality of communication as a proxy for competence in the delivery of the service they're seeking, but correlation between the ability to spin & sell and the ability to subsequently deliver is...low...Ideally there'd be a level of performance related reward as an incentive to the advisor, but structuring reward systems is a notoriously difficult governance issue.

And when a person does know enough to tell good from bad, they're often not actually going to need the service in question anyway so the point becomes to a large extent moot.

In my organisation there's fairly regular webinars on financial planning, including pensions (with individual consultations encouraged) . I guess they act to turn a few unknown unknowns into known unknowns, which is a big improvement.
 
From a market and consumer perspective, ESRI research indicates that, over the longer term, the auto-enrolment system will be beneficial for the economy as retirees will have more disposable income than they would otherwise have had, with just the State Pension to support them.

This is the state making people make a relatively small amount of additional retirement provision for themselves in a guided way.

Making people save some money in addition to the basic state pension is not the same as people voluntarily saving money but making poor financial decisions when they do so.
 
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It is voluntary (60% of UK NEST members have already ditched it) and saying 12% of wages is relatively small depends on your theory of relativity - there I threw in a bit of rocket science.
 
I bought a lottery ticket on Saturday and matched six numbers. Anyone who doesn’t follow my proven winning success strategy is mad.

Do you see the issue here?
 
Marc said:
I bought a lottery ticket on Saturday and matched six numbers. Anyone who doesn’t follow my proven winning success strategy is mad.

Do you see the issue here?
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I presume you're referring to me, but I haven't a clue how what I've written can be compared to buying lottery tickets. Please explain.

I invest for the very long-term in companies that I have researched in some detail and which I think will deliver long-term value. The average holding period for a share I buy is over 10 years. How can that be compared to buying lottery tickets?
Buying unit-linked funds can far more easily be compared to buying lottery tickets, but I'm not making that comparison. I have no objection to people who don't feel confident researching individual shares buying units in funds, but they or their advisers should refrain from criticising people who decide to invest in real businesses that they think they know something about.
 
Colm Fagan said:
I presume you're referring to me, but I haven't a clue how what I've written can be compared to buying lottery tickets. Please explain.

I invest for the very long-term in companies that I have researched in some detail and which I think will deliver long-term value. The average holding period for a share I buy is over 10 years. How can that be compared to buying lottery tickets?
Buying unit-linked funds can far more easily be compared to buying lottery tickets, but I'm not making that comparison. I have no objection to people who don't feel confident researching individual shares buying units in funds, but they or their advisers should refrain from criticising people who decide to invest in real businesses that they think they know something about.
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I have no issue with you investing your own money how you see fit.

However, your posts on here may lead others to conclude it is prudent to do the same when it is not.

You have been extremely lucky but luck is not a good or prudent investment strategy. Hence my reference to lottery tickets.

The lived experience of one fortunate investor is not a statistically significant sample and nobody should be under any illusion about that when reading your posts.
 
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