15% Of Your Salary To Be Compulsorily Confiscated

stoneill

Folks - it's one of those things that gains importance as you get older.
When you are young and starting out pension means nothing, as you get older and closer to retirement it begins
to become a factor.
It is a good idea to get in the habit early of putting some of your hard earned wages aside for later life, you really don't want to be trying to survive on just the state pension, and who knows, maybe when it is your turn to retire there may be no such thing as a state pension.

A_Sober_Paddy

clairefontaine wrote: »

The US started something like this with Social Security under FDR. Yes the left hails him as a hero, forcing Americans to put a chunk of their salary away in the hands of the government to avail of later in old age. There has been much right wing criticism of FDR and of the social security program.

Only now people feel it is running out of money.

There was a thread here a few weeks ago about the government imposing fines on those who cannot prove they have a private bin contract for rubbish collection. It looks like the government is enforcing private subsidy of what used to be government services. And now you are seeing it again but with retirement funds?

I doubt that libertarians would support state confiscation of any one's money.

You could get by without a bin, by composting and recycling...So how on earth could they do that? Or was it just another smoke blowing piece of "journalism"?

coffee_cake

KyussBishop wrote: »

It's a de-facto tax, a forced-subsidization of private financial firms; if this were going anywhere other than finance, you can bet most Libertarians would be railing against it as an unjust tax/subsidy.

It IS unfair to force people to do something like this, but that doesn't mean people who are yelling "it's going to the state" "it's an evil conspiracy" are correct, either
No, I certainly don't agree with the government forcing anything, but since I understand that the pyramid scheme is going to collapse and we'll all be a bit fecked in the future, I can certainly understand the need to at least encourage private provision

Pappa Charlie

The country is broke! People need to get real! Jesus am I in the wrong forum?

clairefontaine

bluewolf wrote: »

It IS unfair to force people to do something like this, but that doesn't mean people who are yelling "it's going to the state" "it's an evil conspiracy" are correct, either
No, I certainly don't agree with the government forcing anything, but since I understand that the pyramid scheme is going to collapse and we'll all be a bit fecked in the future, I can certainly understand the need to at least encourage private provision

The problem is private schemes have also lost credibility. Mine crashed after 911 as did many others.

And it's not as if Ireland's private banking system holds that much trust anymore either. So it could look like a way to prop up the banks- again- but this time with the tenuous promise you will get it back later when you are 68, or by the time new generations are ready to retire the retirement age might be 75 for all we can predict at this stage.

coffee_cake

clairefontaine wrote: »

The problem is private schemes have also lost credibility. Mine crashed after 911 as did many others.

And it's not as if Ireland's private banking system holds that much trust anymore either. So it could look like a way to prop up the banks- again- but this time with the tenuous promise you will get it back later when you are 68, or by the time new generations are ready to retire the retirement age might be 75 for all we can predict at this stage.

This is why people need to research the types of risk they can take in their scheme - you don't have to stick it all into something that'll "crash"
Even in the non self-directed ones, you can http://www.zurichlife.ie/pensions/choice_of_pensions/self_directed_pensions.jsp

srsly78

A_Sober_Paddy wrote: »

Would anything stop you from investing in a cash fund in a bank not operating within Ireland?

Yes the fact that the government has taken most of your income at source.

Fr_Fitzexactly

Pappa Charlie wrote: »

The country is broke! People need to get real! Jesus am I in the wrong forum?

Germany would have been broke too. Around 2001-2003 they were worried about their own pension funds running out

Their solution? Issue lots of high interest bearing loans to countries that now might be known as PIGS countries, when they cant pay it issue them another loan for a longer term so they can pay off the original loan (== more interest for them). So now we'll have no pension but the Germans will

srsly78

Fr_Fitzexactly wrote: »

Germany would have been broke too. Around 2001-2003 they were worried about their own pension funds running out

Their solution? Issue lots of high interest bearing loans to countries that now might be known as PIGS countries, when they cant pay it issue them another loan for a longer term so they can pay off the original loan (== more interest for them). So now we'll have no pension but the Germans will

Really? I thought their solution was to reform their whole system, including welfare and pensions: http://en.wikipedia.org/wiki/Hartz_concept

Should we not do something like this? Or should we go borrow more money to pay for it?

galwayrush

Mother in law had a private pension, she paid in a little over 15K over 10 years. When the time came to cash it in, she got back 3500 in total.
That's what will probably happen to us in the future.

KyussBishop

bluewolf wrote: »

It IS unfair to force people to do something like this, but that doesn't mean people who are yelling "it's going to the state" "it's an evil conspiracy" are correct, either
No, I certainly don't agree with the government forcing anything, but since I understand that the pyramid scheme is going to collapse and we'll all be a bit fecked in the future, I can certainly understand the need to at least encourage private provision

Again, to Libertarians, 'encouraging' (i.e. forcing) of private investment in any area other than finance, would be viewed as nanny-statism at best (in dictating how people should manage their finances), and more like an unjust tax+subsidy.

This move would be neither helpful or necessary; it would in fact be harmful in the present due to dampened demand, harmful in the future as pension funds take hits from future economic crisis (with no guarantee of full return, and the inability for all people forced into this, to educate themselves on safe investments), and people don't even need to use often poorly managed (yet exorbitantly charged in many cases) pension funds to prepare for their future (yet this would force them to).

This would be money taken away, that people won't see again until their 50's or 60's. Personally, I would keep the money at hand in a regular savings account or investments of my own choosing, which I would be free to access in a pinch, and forgo the tax benefits of a pension (which I may never see, either through early death or the pension being pilfered/mismanaged).

coffee_cake

KyussBishop wrote: »

Again, to Libertarians, 'encouraging' (i.e. forcing)

No, not "i.e. forcing".
Educational campaigns and bringing back higher tax reliefs is "encouraging". Making it clear to the public what's likely to happen regarding state pensions and insolvency.
This is forcing, and I have already said I don't agree with it, even though I understand it to some degree.

KyussBishop

bluewolf wrote: »

No, not "i.e. forcing".
Educational campaigns and bringing back higher tax reliefs is "encouraging". Making it clear to the public what's likely to happen regarding state pensions and insolvency.
This is forcing, and I have already said I don't agree with it, even though I understand it to some degree.

Okey, well I'd agree with encouraging awareness of the issue and such, and how that would be understandable; the issue I was noting there though, was that while encouraging is understandable, forcing wouldn't be understandable due to being harmful rather than helpful (though I get that you don't agree with forcing).

Menas

galwayrush wrote: »

Mother in law had a private pension, she paid in a little over 15K over 10 years. When the time came to cash it in, she got back 3500 in total.
That's what will probably happen to us in the future.

What fund did she invest in? What was her risk spread and how much was spent on fees?
Why do you think this will happen in the future if for example you invest in a cash fund?

Menas

I think most right minded people would agree that depending on the state pension to survive will not be a good idea as it will only get relatively smaller and smaller.
So people need to make some considerable provisions for their own retirement.
The question becomes....
1) does the governme t make it mandatory to put money aside for your retirement?
2) if yes, how to do that and how much.
3) if no, now will the state handle the upcoming pensioner poverty problem?

A US style 401k is best in my opinion. Allow people to manage their own fund if they so wish or allow them to choose their risk profile and leave it to a fund manager.
Increasing the tax exemptions on pensions is also needed to incentivise.
And more regulation of the industry is needed.
We have seen on this thread that some really do not trust the pension industry and assume that the state pension will meet their needs on retirement.

wolfpawnat

It should be encouraged as opposed to being forced. If you don't do it, make it known the onus is on you to have done it, but allow people to do it however they choose themselves.

I am living in my landlords pension. Near 1000 a month on top of his state pension and another house somewhere worth 1300 a month. Rents go up and down with the economy, that is his risk. Other people have saving accounts (My MIL for example) and my uncle invested. 150,000 was only worth 25,000 in the end, but that was his choice. I can't pity him. It is a gamble.