Best AVC in the Irish market 2019

TestLink

I work in a local authority and is a member of Forsa. I am looking to join an AVC.

May I know whether the AVC amount is cut before Tax or after Tax?

Would joining an AVc reduce the tax I pay and save money?

Is there any firm that you would suggest? I prefer to buy it directly from a firm like Irish Life etc, rather than going via a broker.

Is there a group policy sceme that you would suggest?

Any suggestions?

TestLink

I have got quotes from 2 brokers regarding AVC.

Company A:
Setup Fee: 400
Annual Fee: 1%
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 0

Company B:
Setup Fee: 0
Annual Fee: 7% of annual contribution towards AVC
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 5% of total fund amount

Any advice, which one is the best value for money?

AndrewJRenko

TestLink wrote: »

I have got quotes from 2 brokers regarding AVC.

Company A:
Setup Fee: 400
Annual Fee: 1%
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 0

Company B:
Setup Fee: 0
Annual Fee: 7% of annual contribution towards AVC
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 5% of total fund amount

Any advice, which one is the best value for money?

It's a bit like trying to decide what's the best car, based on petrol consumption alone. There's a bit more to it than that. What range of investment funds do you have available to you with each of these options?


In short, A is taking their money up front, whereas B is taking a much bigger chunk of your money each year, with the promise of getting some of it back as a bonus.


You should check the option available from Forsa too; https://www.cornmarket.ie/avc/



You'd need to do some quick calculations, based on your proposed annual contribution.






All your pension contributions will be tax free. If you're a high rate tax payer, this means that roughly 40% of your pension contributions will be tax savings.

TestLink

AndrewJRenko wrote: »

It's a bit like trying to decide what's the best car, based on petrol consumption alone. There's a bit more to it than that. What range of investment funds do you have available to you with each of these options?

In short, A is taking their money up front, whereas B is taking a much bigger chunk of your money each year, with the promise of getting some of it back as a bonus.

You should check the option available from Forsa too; https://www.cornmarket.ie/avc/

You'd need to do some quick calculations, based on your proposed annual contribution.

All your pension contributions will be tax free. If you're a high rate tax payer, this means that roughly 40% of your pension contributions will be tax savings.

I have the say where to invest: Govt. Funds - Medium Risk - Max growth, in both cases.

I would be contributing around 200 euro per month.

AndrewJRenko

TestLink wrote: »

I have the say where to invest: Govt. Funds - Medium Risk - Max growth, in both cases.

I would be contributing around 200 euro per month.

What age are you?

coylemj

TestLink wrote: »

Is there a group policy sceme that you would suggest?

Shouldn't you be asking the payroll department where you work, or maybe your local union official? If there is a group scheme, that's where you should be seeking information.

Whatever you do, avoid that scheme with a 7% annual deduction, that is a criminal levy.

coylemj

TestLink wrote: »

I have the say where to invest: Govt. Funds - Medium Risk - Max growth, in both cases.

If you're more than 10 years away from planned retirement, go for max. growth. This will involved a heavy exposure to equities (shares) and may involve a bit of a roller-coaster ride over the next few years but stick with it as over the long term, shares provide the best return. Worst thing you can do is invest in shares, panic when there's a crash so you move your money into bonds and miss the stock market rebound. 'Invest and forget' is the rule. Begining 10 years from retirement, consider moving 10% of the fund each year into safer (i.e. less volatile) funds.

TestLink wrote: »

I would be contributing around 200 euro per month.

Decide what net contribution you want to make i.e. how much of your take-home pay you want to contribute, then divide that number by (1-your marginal tax rate) and that's how much gross you contribute.

If you want to contribute net €200 p.m. and your marginal PAYE rate is 20%, you should contribute €250 p.m. gross and if you're paying 40% tax at the top of your salary, you'd contribute €333 gross.

Henry Ford III

TestLink wrote: »

I have got quotes from 2 brokers regarding AVC.

Company A:
Setup Fee: 400
Annual Fee: 1%
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 0

Company B:
Setup Fee: 0
Annual Fee: 7% of annual contribution towards AVC
Policy Fee: 0
Contribution Charge: 0
Bonus money at retirement: 5% of total fund amount

Any advice, which one is the best value for money?

It's actually the brokers job to tell you. Best advice etc.

TestLink

AndrewJRenko wrote: »

What age are you?

44

Baoithin66

Synergy Finance were recommended to me by a colleague who found them very good compared to the reps who have deals with Forsa. Haven't contacted them myself yet!