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Is it time to start a Pension?

  • 05-06-2008 8:19am
    #1
    bibbly
    Closed Accounts Posts: 63 ✭✭


    I have been working on a 12 month contract, which will be renewed (another 12 month contract).

    My company offers a PRSA pension scheme for contract workers, it seems quite good, any contributions up to 6.7% of gross salary are matched. Im 25 and earn a very basic salary.

    Is it worth starting a pension now even though i don't have a secure job? or waiting until i find a permanent position, and saving then? Or should i just set up a decent saving account that i can access incase of emergency (i.e being made redundant)

    Any comments welcome!


Comments

  • #2
    homer911
    Registered Users, Registered Users 2 Posts: 5,150 ✭✭✭homer911


    Its never too early to start a pension. You dont state whether you are self-employed or employee. If an employee, you can save on Tax and PRSI through the scheme. If self-employed, I could be wrong but I think you only get Tax relief - talk the HR department where you are working, they should have more information.


  • #3
    dotsman
    Registered Users, Registered Users 2 Posts: 3,636 ✭✭✭dotsman


    I agree, you are never too young. Whether self-employed or an employee, there are massive tax advantages and with your company will to match your contributions, I would say go for it.

    On the other hand, you are young, so you don't need to be making huge contributions at the expense of your current financial state. What affect would, say even, 5% have on your current budget (ie a total contribution of 10%). Can you do without?

    Pensions are the best and cheapest form of saving. The only downside is that you don't get to see your money until you retire:(

    I am 27 and have been putting 10% into a pension since I was 23. Once in my 30's (and started to get a handle on my mortgage) I'll up that to 15-20% (I hope!). Once whatever kids I may have are put through school/college and kicked out of the house, my contributions will be up to the max. On top of that, I would also like to have other savings and investments.

    What with advances in health etc, you could easily live for 20-30 years after retiring, not only that, but you are likely to be healthy for a large part of that and want to enjoy it (plenty of holidays, see the world, play golf, take your new 19-year-old girlfriend to dinner and shows etc.:D)


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