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To pension or Long term deposit account

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  • 23-08-2013 3:53pm
    #1
    badgerhowlin
    Registered Users Posts: 651 ✭✭✭


    Hi,

    Im 32 and looking into starting up a pension.

    My question which would be better to save you 200 a month into a long term savings account or post office or credit union or something like that.
    OR
    put it into a pensions account.

    Employer will be paying nothing into the Pension.....


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    #2
    coylemj
    Registered Users Posts: 25,394 ✭✭✭✭coylemj


    The tax benefits of pension contributions means that it's really a no-brainer. At your age you need to put it into a managed fund, preferably via PRSA which your employer is obliged to arrange, depending on how many employees are in the company.

    You will be saving for the pension for at least 20 years and over that timescale, no investment can beat stocks and shares, provided you make sure that the money is progressively moved into more stable funds in the 10 years or so before you reach retirement age in order to protect you from any sudden downward movements in the markets such as happened at the end of the dot com boom and the recent banking crisis.

    I'm not going to name the company for fear you'll think I'm plugging a particular product but the 'Balanced' fund offered by one of the well known companies operating in the Irish market is showing an annualised increase of 8.5% over the last 20 years. Try getting that from a credit union or the post office.


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    #3
    Almaviva
    Closed Accounts Posts: 1,490 ✭✭✭Almaviva


    coylemj wrote: »
    one of the well known companies operating in the Irish market is showing an annualised increase of 8.5% over the last 20 years. Try getting that from a credit union or the post office.

    Plus the tax break. As coylemj says, its a no brainer.


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    #4
    badgerhowlin
    Registered Users Posts: 651 ✭✭✭badgerhowlin


    Thanks lads. I was thinking that way alright but just the talk down at the pub got me thinking 2nd guessing my self


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