Pension/AVC question.

ooter

I have been in an AVC for 20 years now but to be honest I've never really put a lot in to it per week up to now, recently I have been looking at putting more money in to my pension and availing of the tax breaks on offer. I wouldn't be able to afford the maximum allowable contribution for my age but I was thinking around the €5,000 mark.
I normally don't even look at them but I recently had a look at my most recent statement for my avc and what it will potentially be worth on retirement and to be honest the figures are not too impressive, I'd be wary of giving them any more of my money
Do I have to pay that money in to my existing AVC or can I put it in to a separate pension plan?

bilbot79

ooter wrote: »

I have been in an AVC for 20 years now but to be honest I've never really put a lot in to it per week up to now, recently I have been looking at putting more money in to my pension and availing of the tax breaks on offer. I wouldn't be able to afford the maximum allowable contribution for my age but I was thinking around the €5,000 mark.
I normally don't even look at them but I recently had a look at my most recent statement for my avc and what it will potentially be worth on retirement and to be honest the figures are not too impressive, I'd be wary of giving them any more of my money
Do I have to pay that money in to my existing AVC or can I put it in to a separate pension plan?

Presume by 'AVC' you mean your occupational pension scheme. I think that's where you should put it if so. If you're not already putting in AVCs (additional voluntary contributions) then yes it would look pretty bare years from now. It's the AVCs that make the difference.

For example, at the bottom of the market this year my pension was down 13% compared to my contributions. Now it's up 20% but because I now have twice as much in it as I used to have I'm up 12k instead of 6k. The more you have in it the more you win

Geuze

I'm not sure if you can have more than one AVC attached to an occupational pension plan?

The J Stands for Jay

Geuze wrote: »

I'm not sure if you can have more than one AVC attached to an occupational pension plan?

You can have as many PRSA AVCs as you want

bilbot79

Geuze wrote: »

I'm not sure if you can have more than one AVC attached to an occupational pension plan?

I think you can make as many AVCs as you like but the tax free benefits are only up to a point.

If I had enough cash I'd be throwing in net AVCs all the same as the growth is tax free regardless.

Blub123

bilbot79 wrote: »

as the growth is tax free regardless.

Can you explain this as my understanding was that a lump sum can be taken however all residual is taxed??.. Are you saying the final amount less what you actually invested is tax free??

Thanks

bilbot79

Blub123 wrote: »

Can you explain this as my understanding was that a lump sum can be taken however all residual is taxed??.. Are you saying the final amount less what you actually invested is tax free??

Thanks

The final amount is income taxes however you take it but you won't pay capital gains like you would in normal investing.