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Time to cancel the PRSA ?

  • 05-04-2009 1:59pm
    #1
    iMax
    Closed Accounts Posts: 3,489 ✭✭✭


    Quick question for those more knowledgeable than myself.

    I started a PRSA pension a couple of years ago, on my last issued certificate I noted that it had lost approx 28% of what I had put into it. Around this time I had an opportunity to join a work PRSA where my employer would contribute 5% salary as well as my contributions.

    This amounts to approx €130 per month which will over time hopefully address the loss of funds already.

    I know pensions are over the long term & that no-body "foresaw" what would happen (although I thought that was what they were supposed to do & act accordingly).

    Would I be better off cancelling the PRSA all together, cashing in my funds (not a whole lot at all, only a couple of thousand) & using that money to pay a sum off my mortgage.

    Basically just forget about the pension, work towards paying off the mortgage earlier than anticipated & hoping that I'll be able to manage at that point ?

    I know I'll lose the tax relief, but over time the €250 a month I pay into pension vs pay off the mortgage should equate to more money "saved"


Comments

  • #2
    Tipsy Mac
    Closed Accounts Posts: 2,559 ✭✭✭Tipsy Mac


    iMax wrote: »
    Would I be better off cancelling the PRSA all together, cashing in my funds (not a whole lot at all, only a couple of thousand) & using that money to pay a sum off my mortgage.

    Basically just forget about the pension, work towards paying off the mortgage earlier than anticipated & hoping that I'll be able to manage at that point ?

    I know I'll lose the tax relief, but over time the €250 a month I pay into pension vs pay off the mortgage should equate to more money "saved"

    I am sorry to inform you but you cannot "cash in" your PRSA, it's there until you retire or in extreme circumstances if you were to fall gravely ill it may be permissable to cash it in.


  • #3
    iMax
    Closed Accounts Posts: 3,489 ✭✭✭iMax


    Fair enough, but what about abandoning it & using the funds to pay additional payments on the mortgage ?


  • #4
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    But you are getting a contribution from your employer as well, and you would lose that.

    Maybe your employer is planning on cancelling the contribution anyway?

    It sounds pathetic, but your contributions at the moment are going into a low market, so you will get a bigger lift on your pension when markets bounce back. So stopping now might not be a good idea.

    It's difficult to answer your question, because we don't know what sort of other provision you've made for your retirement. We also don't know whether you are in really dire straits and just can't contribute to the pension. You obviously wouldn't be depending on boards.ie alone to get advice about such a big decision anyhow.

    Take professional independent financial advice before you make any decision on this.


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