To AVC or not to AVC?

[confused 1]

Please help!!

I am a 26 year old health care professional whose eyes glaze over with talks of pensions... Am currently being sold an AVC scheme by Cornmarket. Set up fee is 450 euro... Is this too dear?? I have no house yet... am saving...Hope to purchase in the next year. Should i wait till I own property before setting up??? Have been paying superannuation since I began work in 2002. Plan to not always work full time if I have family etc.....Hope to not be setting foot in work by the time I hitting for 60..What should I do??

 

[ajapale]

Re: To AVC or not to AVC??

Search this forum for AVC + cornmarket you will get plenty of hits.

some thoughts:

I assume (from the reference to superannuation) that you are a health professional in the public sector (HSE)?

Since your superannuation scheme is excellent I do not see many reasons for a young single person to set up an avc.

Ask your HR department how superannuation works for people who job share (or go to part time working) for a while, I know some people continue to pay full superannuation while they job share.

Have you spoken to your trade union? Normally they are quite good but bear in mind that in some cases they are not quite independant.

Talk to cornmarket and ask them what the charges are. Bear in mind that they are sales people, but if you ask them the right questions they can know a lot about your superannuation scheme.

If you really want to augment your superannuation you could look at a PRSA and compare the charges to those on offer from cornmarket.

You should also get some independant professional tax advice since you will have maximum service 40 years at age 61. Im not sure how AVC income is taxed where you retire on maximum benefit from the main superannuation scheme.

 

[Guest126]

Re: To AVC or not to AVC??

You should also get some independant professional tax advice since you will have maximum service 40 years at age 61. Im not sure how AVC income is taxed where you retire on maximum benefit from the main superannuation scheme.

This person would not be at revenue maximum - don't forget the revenue maximum allows for 100% Spouse Pension and a main pension of 2/3rds before commutation for the tax-free lump-sum...that would be a hell of a lot more costly than the usual public servant maximum pension of 40/80 and a lump-sum of 120/80 with a 50% spouse pension.