Pension Options

I am 52 and have have 5 different pensions
1. Current employer worth about 425K which I’m contributing to monthly with Zurich
2. Last employer - 260K in a PRB with Irish Life
3. Previous employer - Buy out bond 150K with Zurich
4. UK pension about 55k GBP
5. 15K in a really old Private pension plan with XZurich

If possible I’d like to retire comfortably at 60, not sure ill really have enough in the pot by then, i am contributing the max amount Tax free for the last couple of years and i would hope to continue to do that through to 60-61 That would be about 350K more plus employer contributions 100-150 depending on a number of variables.

Regarding my current pensions, I don’t think any of them are performing particularly well, i would expect they could minimally track the S&P, that’s a pretty safe bet but not so. Consequently I’m thinking of moving some of it to self administered, however I’m not sure which ones i would be allowed to do that with, obviously not the current active one, and i understand I’m best to leave the UK one where it is for the moment.

I have 3 separate qquestions where I’d appreciate any opinions and insights:

1. Which of the above could i move to self administered and how does that work, I am a member of MyWallst Horizon( i have about 125K invested already), so I’d probably lump it into those stocks, are the fees exorbitant to do that if self administered? Am i mad?
2. I’m thinking about buying a place in Portugal, I know i could draw down 25% or 200K as I’m over 50, howecvwer is it the larger of the 2 and does it all have to come from the same fund Or could i take it from #2 above?
3. My wife is a public servant but jobshared most of her life so will not get a full public servant pension, I’m thinkking we should be aggressively ‘buying back’ her years of service as her pension is defined benefit, so zero risk assuming no changes by the gov compared to the usual cornmarket AVC option? I don’t see any real upside to an AVC its just more risk aand i have enough risk in my own pension. Am i missing anything there?

thanks in advance!

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• Horizon has beaten the S&P 500 every day since launching in December 2019

less than 2 year track record! Massive alarm bell here.

i need about 80 years of stock market returns just to demonstrate with a high degree of statistical confidence that I expect stocks to beat t-bills.


this is a really really really terrible idea. Stock picking newsletters generally only make money for the person promoting the newsletter and most are closed down after a few years when the inevitable losses catch up.

I’d strongly recommend closing that down immediately. Just like Prize Bonds if you’ve made any money at all it’s down to good luck not good strategy.

Over the last 100 years 96% of stocks in the USA either lost money or failed to provide a higher return than cash.


tax free lump sum is 25% of the fund value up to €200 above that the next €300k is taxed at 20%

Do you plan to retire to Portugal?

If so you shouldn’t do anything at all with your pensions until you have taken some planning advice.

It might make more sense to roll the buyout bonds into your current occupational scheme and transfer the whole lot out of Ireland as you retire from your current employer

buying back additional service is a great investment option which is ridiculously underused simply because it doesn’t pay commissions.

Again, I’d be looking at your overall financial position and as you say taking a little more risk with your pensions to compensate for her virtually risk free retirement fund.


Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie

Thanks Mark, interesting perspective on the Horizon plan. I actually believe in Emmet and the approach as it’s a 10year perspective and I theres a lot of research into the picks. I also think what is different is that he is investing his own money along side you, so you’re in it together for 10 years with a view to 10X+ the outlay.
What I’m frustrated with is the performance of the other pensions, which is I am thinking of moving them to self administered and putting it all on the S&P. As per your link, it’s hard to beat the market and certainly pension fund managers seem to struggle to get anywhere near it.

Thank you for confirming my opinion on the public sector pension.

Well good luck with that. I always laugh when people use the “he invests his own money” argument as if that wasn’t an absolute bare minimum slam dunk table-stakes expectation from the get go.

we all want to believe we’ve found the next Warren Buffett and an easy way to make money.

The fact is that you have already made some good returns and your attention should really turn to investing rather than speculation. Diversification and boring index investing is the way to stay financially comfortable. What you are doing is the quickest way to lose it.

As I say to all our clients, the techniques you use to make lots of money are broadly the opposite of what you need to hang onto it.

you can take all of this at face value or find out the hard way. Again as we say the market hands out much larger tuition bills than we do.
Sean Quinn is the poster boy in Ireland for that lesson

you can follow my own investment strategy for free on twitter


That’s just the return of the market


I’d suggest that you keep good records of your Capital Gains losses as we can help you to use those for some tax planning in the future.

ctlsleh said:

Thanks Mark, interesting perspective on the Horizon plan. I actually believe in Emmet and the approach as it’s a 10year perspective and I theres a lot of research into the picks. I also think what is different is that he is investing his own money along side you, so you’re in it together for 10 years with a view to 10X+ the outlay.
What I’m frustrated with is the performance of the other pensions, which is I am thinking of moving them to self administered and putting it all on the S&P. As per your link, it’s hard to beat the market and certainly pension fund managers seem to struggle to get anywhere near it.

Thank you for confirming my opinion on the public sector pension.

Click to expand...

If you believe in his strategy, why don't you set up a self admin and invest your pension in his strategy? I wouldn't do it in a million years. His strategy is far too risky and you'd want to have a stomach of iron and be willing to a lot of your investments fail completely and be worth zero and others shoot out the lights. You'll end up with the endorphin rush of a gambler in a bookies.

There are lots of insurance companies that track the S&P 500 (which is a completely different approach to Emmet's). Standard Life and New Ireland have suitable funds for starters without having to set up a self admin.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Yes, that's what i'm suggesting. I appreciate there is risk with Emmet's approach and i can live with that. I am assuming that people don't like it as its a stock picking strategy, however does anyone know him and is performance?
Personally, I see it as a long term bet and i do appreciate the concerns, thank you for that. if he does work through my retirement in 10 years will be pretty secure and worst case, ive probably tracked the market more or less, i dont think ill lose everything.

Where i'm coming from however is that I have a number of other pensions that aren't doing much and where i would expect better performance, surely pension companies should be able to track the S&P500 as a minimum?
So i am suggesting that i move some, maybe 50%, of those to self administered and go all in on the an S&P500 tracker.
I still would not consider that a particularly high risk strategy or would people disagree with that?

In essense i woudl have the following:
I would then have a pretty high risk strategy with Horizon that's already in place
I would have ~50% of my total pension pot in a mid risk strategy tracking the S&P500
I would have a low risk strategy for my current pension that is delivering a few % growth YoY

I am interested if people would consider that a reasonable/sensible approach, or with the expectation of Horizon which i appreciate is causing some concerns, should i consider a different strategy?

one clarification on the 200K or 25%, do i need 800K in one fund to draw down the 200K, or could i take 200K out of any of the pensions?

Thanks again for the feedback on my post, i find the feedback incredibly insightful and positive.

The worst one year fall on record for the US market is minus 67% in the 1930s.

In October 1987 it dropped 22% in a single day. I’m not sure I’d describe that as “mid risk”

Why not invest appropriately using a global index?

Also why not consider the tax side of this planning ahead of the investment aspects. You spend after tax income.

I still have a 10+ year runway, and to your point your pension is performing very well, mine isn’t, which is my point in the first place and which is what I’m looking to rectify.
Let’s leave aside the Horizon issue, I’m not planning to put my pension into it, that is my high risk strategy with some excess cash, and as I previously mentioned maybe I burn on that in the next 10 years, maybe not.
You proposed I put my pension into a global tracker, however isn’t that what most pensions are in already if you’re with Zurich Balanced or Irish life IL4? And my current fund is in one of those, so shouldn’t I be looking for something that would perform similar to yours? You grew yours by 50%, and that’s exactly the reason I started this thread, mine grew about 8% in the same period and the S&P grew by over 100%, hence why I think I need to rejig some of the pensions.

I’m not sure I’m following your question on tax planning for the future, If you are suggesting that I take residence in Portugal and move my pension there, yes, I’m aware of that tax free options and at this point in time, I want to live in Ireland for 8-9months of the year, so don’t think that option is available to me.

By the way, thanks for the insights, I can see that the Horizon investment is causing some irritation, sorry about that, I’m in it for the foreseeable and haven’t lost any money yet, despite the recent pullbacks, we will see how it goes, I always have the option to pull out.

I am now following you on Twitter……

thanks for the insights!

You’re welcome

as I set out in this post in thread 'Buy out Bond - what are my options'
https://www.askaboutmoney.com/threads/buy-out-bond-what-are-my-options.223236/post-1716667

you should start the process with some good planning. Nobody would build a house by just lashing some bricks together.

You need a blueprint to set your direction of travel and establish the right asset allocation.

ctlsleh said:

Yes, that's what i'm suggesting. I appreciate there is risk with Emmet's approach and i can live with that. I am assuming that people don't like it as its a stock picking strategy, however does anyone know him and is performance?
Personally, I see it as a long term bet and i do appreciate the concerns, thank you for that. if he does work through my retirement in 10 years will be pretty secure and worst case, ive probably tracked the market more or less, i dont think ill lose everything.

Click to expand...

I don't know him and hadn't heard of him before. A quick google research shows that he has a very successful app, so well done to him.

What I don't like is selling information on what is a very high risk strategy. He says in his video that some will make it and some will not. This boom or bust approach to investing is only suitable to a small amount of people and you should be able to absorb the losses first. If he goes on a bad run, some people will lose all their money and will not be able to benefit if he then goes on a winning streak. It is an extremely high risk approach.

ctlsleh said:

You proposed I put my pension into a global tracker, however isn’t that what most pensions are in already if you’re with Zurich Balanced or Irish life IL4?

Click to expand...

The Zurich Balanced fund has bonds in it too. If you want greater long term returns, go into one of their purely equity funds, they have loads of them.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)