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Public Sector Retirees 1

January 24, 2012

Public Sector Workers Retiring Next Month

Have you thought what you will do with your tax free cash? Here are some options:

• Reduce/ pay down outstanding debt – mortgages/credit cards/ loans etc.
• Invest in Capital Guaranteed Products.
• Invest in Government Savings Bonds.

If you are interested in investing there are a variety of options available to you.

• Invest in a bank deposit within a life company: For example Irish Life are currently offering rates of 23.5% gross for a 5 year period on lump sum investments over €10,000 through Permanent TSB.
• Invest in a variety of fixed term bonds with Irish Government bonds and certificates. Their 5 year certificate pays 21% net after 5 ½ years. The growth on these investments is tax free.
• Invest in a variety of unit linked funds with life companies which depending on your attitude to risk, may provide higher returns than bank deposits. Minimum investment starts from €5,000.
• There is a variety of capital guaranteed investments available also. For example, BCP are currently offering a fixed rate of 4.5% gross for 5 years subject to a minimum investment of €25,000.

Before deciding to invest it is very important that you ask yourself how comfortable you would be if your investment lost some value especially in the short-term. Investing is usually for the medium to long-term (typically, 5-7 years or more) to give investments time to grow in value. However, even long-term investing involves risk as values will fluctuate over time and most investments do not provide a guaranteed level of return or a promise that you will not lose money.

As a general rule of thumb, the greater the potential return you want from your savings and investments, the greater the risk you have to take. It is important to talk to a financial advisor about the level of risk you are prepared to accept and what it will mean to the returns you can expect. This should then influence the type of funds that you invest in – funds that suit your appetite for investment risk.

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