Do you have a pension?

KomradeBishop

Pensions are a fantastic way of making other people money, and ending up with pretty shít value on your investment.

Save the money yourself. It's common enough for pension funds to stuff money into risky investments, to take exorbitant fees for themselves for doing barely anything, and there are constant news stories about pension fund frauds, so just put your money somewhere safe instead.

You don't know what's going to happen in the few decades time it's going to take, before you start seeing any of that money, and your money is far safer in a bank account rather than a financial institutions investments; come a big enough crisis blowing up funds in the financial industry, and you may find yourself better off having saved or put money in assets instead - I'll certainly never trust a cent to such a fund.

bnt

None of those three options apply to me. Don't smoke or gamble and barely drink at all; yet with my salary vs. the cost of living, I won't be retiring by choice. More likely I get laid off at an unemployable age, and muddle on through till the sky falls on my head.

enfant terrible

KomradeBishop wrote: »

Pensions are a fantastic way of making other people money, and ending up with pretty shít value on your investment.

Save the money yourself. It's common enough for pension funds to stuff money into risky investments, to take exorbitant fees for themselves for doing barely anything, and there are constant news stories about pension fund frauds, so just put your money somewhere safe instead.

You don't know what's going to happen in the few decades time it's going to take, before you start seeing any of that money, and your money is far safer in a bank account rather than a financial institutions investments; come a big enough crisis blowing up funds in the financial industry, and you may find yourself better off having saved or put money in assets instead - I'll certainly never trust a cent to such a fund.

How common is pension funds going bust?

TheLastMohican

Ronnie Worried Workaholic wrote: »

Totally the wrong tack. Pay in what you can as early as you can. Never underestimate the power of compound interest. Of course if you have zero disposable income that is a different matter but also consider that pension contributions are very tax efficient.

I had gathered from your posts that you were/are a parsimonious sage.
But, honestly, does the OAP not fulfill your needs?
People who are ultra safe during their working lives are hardly going to go haywire in the Autumn of their years.

And people who have a lot to invest in pension funds during their working years are either overpaid, very tight in the Spending Stakes or complete phobics.

Just my thoughts.

ytpe2r5bxkn0c1

TheLastMohican wrote: »

I had gathered from your posts that you were/are a parsimonious sage.
But, honestly, does the OAP not fulfill your needs?
People who are ultra safe during their working lives are hardly going to go haywire in the Autumn of their years.

And people who have a lot to invest in pension funds during their working years are either overpaid, very tight in the Spending Stakes or complete phobics.

Just my thoughts.

What a load of twaddle and how dare you! So once I'm 65 I'm expected to live on 12k a year? Old age is not oblivion you know. I enjoy travelling, having a new car every few years, being able to afford to replace the ailing pc with a new surface pro, buy decent clothes...and generally live to enjoy life. That that bothers you says more about you than me.
I am far from parsimonious, I can assure you, and how you can suspect so is beyond me. I worked hard, raised and educated a great family and knew what the important things in life were. It isn't a matter of being overpaid with a lot to invest; it's investing a little and often and taking a long term view.
So drop that chip and stop the begrudery.

Menas

TheLastMohican wrote: »

I had gathered from your posts that you were/are a parsimonious sage.
But, honestly, does the OAP not fulfill your needs?
People who are ultra safe during their working lives are hardly going to go haywire in the Autumn of their years.

And people who have a lot to invest in pension funds during their working years are either overpaid, very tight in the Spending Stakes or complete phobics.

Just my thoughts.

What? We should all forget about planning for our pensions and be happy with living hand to mouth on a state pension when we get old?
No holidays or travel.
No money for repairs to our homes.
No car.
No money to help our family in a crisis?

Nah...thanks for the advice, but I prefer a more comfortable existence!

There are pensions that will let you invest in safe cash/bond funds, it doesn't all have to be equities

charlietheminxx

I see a few people commented at the start of this thread that I should contribute more to my pension now. After rent, bills, car money etc, I have about €550 a month to play with. I pay €120 of that into my pension and €25 for my life assurance. Given that I am trying to save and enjoy my life as well, I don't think I could increase that much more without negatively impacting my quality of life.

Barely There

TheLastMohican wrote: »

And people who have a lot to invest in pension funds during their working years are either overpaid, very tight in the Spending Stakes or complete phobics.

I can smell the envy off this one.

The J Stands for Jay

justchecked wrote: »

Sell the gaff and rent for the last decade or so.

Yeah good one. Rely on a depreciating asset (through wear and tear), that you'll form an emotional attachment to, that is an extremely illiquid asset and the cost of financing it is many times greater than its value or cost. Enjoy your 'retirement'.

fullstop

Yes, 8.5% of salary plus another 7.5% contributed by employer, or thereabouts.

Phoebas

KomradeBishop wrote: »

Pensions are a fantastic way of making other people money, and ending up with pretty shít value on your investment.

Save the money yourself. It's common enough for pension funds to stuff money into risky investments, to take exorbitant fees for themselves for doing barely anything, and there are constant news stories about pension fund frauds, so just put your money somewhere safe instead.

You don't know what's going to happen in the few decades time it's going to take, before you start seeing any of that money, and your money is far safer in a bank account rather than a financial institutions investments; come a big enough crisis blowing up funds in the financial industry, and you may find yourself better off having saved or put money in assets instead - I'll certainly never trust a cent to such a fund.

For most individual investors, putting their money somewhere 'safe' means putting it on deposit or buying safe (read: low yield) government bonds. Both of these options yield hardly anything - you'd struggle to even match inflation. Anyone following this advice won't get any pension tax relief and will pay DIRT or CGT on any meagre returns.

This is crap advise for anyone who wants to save to provide a pension income in retirement.
But as long as the evil pension fund managers aren't getting a cut, its all good, right?

Barely There

KomradeBishop wrote: »

Save the money yourself. It's common enough for pension funds to stuff money into risky investments, to take exorbitant fees for themselves for doing barely anything, and there are constant news stories about pension fund frauds, so just put your money somewhere safe instead.

You don't know what's going to happen in the few decades time it's going to take, before you start seeing any of that money, and your money is far safer in a bank account rather than a financial institutions investments; come a big enough crisis blowing up funds in the financial industry, and you may find yourself better off having saved or put money in assets instead - I'll certainly never trust a cent to such a fund.

Anyone dumb enough to follow this advice deserves to end up destitute in old age.

Phoebas

bluewolf wrote: »

There are pensions that will let you invest in safe cash/bond funds, it doesn't all have to be equities

There are - you can generally set the risk profile yourself and have it all in cash and bonds. Many funds automatically move larger percentages of the fund into cash and government bonds as you approach retirement (e.g from 10/15 years out).

The trouble with safe investments is that they don't provide great returns. Equities have historically been safe over the long term.

GreeBo

KomradeBishop wrote: »

Pensions are a fantastic way of making other people money, and ending up with pretty shít value on your investment.

Save the money yourself. It's common enough for pension funds to stuff money into risky investments, to take exorbitant fees for themselves for doing barely anything, and there are constant news stories about pension fund frauds, so just put your money somewhere safe instead.

You don't know what's going to happen in the few decades time it's going to take, before you start seeing any of that money, and your money is far safer in a bank account rather than a financial institutions investments; come a big enough crisis blowing up funds in the financial industry, and you may find yourself better off having saved or put money in assets instead - I'll certainly never trust a cent to such a fund.

Yeah, much better to let it waste away against inflation and .5% and ignore the tax free investment alright...
Do you not like free money?

Bubbaclaus wrote: »

I'd prefer to invest my own money for the future, and have access to it if needed, rather than giving it away for a few decades.

Tax relief is a myth too, you're not getting tax relief...you're just postponing when you'll pay tax until later.

Your investment gets to benefit from x years of tax free principle, you don't see any value in that then?

The J Stands for Jay

FURET wrote: »

Really wish Vanguard would set up pension plans in Ireland with Irish employers.

<smug mode> my avc is in a vanguard fund </smug mode>

FURET

McGaggs wrote: »

<smug mode> my avc is in a vanguard fund </smug mode>

Irish employer-sponsored plan?

One More Toy

Bubbaclaus wrote: »

I'd prefer to invest my own money for the future, and have access to it if needed, rather than giving it away for a few decades.

Tax relief is a myth too, you're not getting tax relief...you're just postponing when you'll pay tax until later.

A myth? So relief at marginal rate is a myth?

Tax free lump sum up to quarter of a million a myth?

Menas

Had a look at my pension there....it is invested in three Irish life funds. We can select the funds our pot is invested in...most funds seem to be really doing well this last couple of years.

http://s3.postimg.org/6my1hu4yr/Pension_may15.png

The J Stands for Jay

FURET wrote: »

Irish employer-sponsored plan?

Yeah. Main scheme in noncontributory DB.

RayM

Even thinking about pensions (or anything related to participation in the Capitalist system) bores me to the point of not wanting to reach tomorrow, let alone old age. I lead a very frugal existence, I don't drink, smoke or have any expensive pastimes, so I reckon I'll be fairly low-maintenance and will be perfectly comfortable on the state pension.

Thargor

RayM wrote: »

Even thinking about pensions (or anything related to participation in the Capitalist system) bores me to the point of not wanting to reach tomorrow, let alone old age. I lead a very frugal existence, I don't drink, smoke or have any expensive pastimes, so I reckon I'll be fairly low-maintenance and will be perfectly comfortable on the state pension.

Lol, you wont participate in the capitalist system you'll just suck up the free money from the taxes the rest of us participants pay?

RayM

Thargor wrote: »

Lol, you wont participate in the capitalist system you'll just suck up the free money from the taxes the rest of us participants pay?

I didn't say anything about non-participation. I said thinking about it makes me want to die. Therefore, I don't think about pensions.


Edit: Bizarre that your post has received 'thanks' after the blatantly obvious has been pointed out. I genuinely worry about people's reading comprehension skills sometimes.

Jon Stark

bluewolf wrote: »

There are pensions that will let you invest in safe cash/bond funds, it doesn't all have to be equities

Most investment products worth investing in would provide fund variety, and equity would be one of the more volatile funds to invest in. Property too.

Inflation linked and Liquidity are the safest funds to put the majority of your money in. You're unlikely to suffer a loss by investing mostly in these funds.

DC plans are absolutely worth joining if you're happy with the long game, as in if you're happy to take the chance of living until your 65 or whatever. Your employer is meant to match your own contribution so you have to see it as getting the most out of them monetary wise.

Basically if you plan on maintaining a certain lifestyle in your older years then joining a pension plan is well worth it.

Galwayguy35

What are these jobs that an employer also pays into a pension for the employees?

I'm 23 years working and no employer paid anything towards a pension.

KomradeBishop

Phoebas wrote: »

For most individual investors, putting their money somewhere 'safe' means putting it on deposit or buying safe (read: low yield) government bonds. Both of these options yield hardly anything - you'd struggle to even match inflation. Anyone following this advice won't get any pension tax relief and will pay DIRT or CGT on any meagre returns.

This is crap advise for anyone who wants to save to provide a pension income in retirement.
But as long as the evil pension fund managers aren't getting a cut, its all good, right?

Simply put, you have no real idea what you're going to see back from what you put into your pension (you don't know what is going to happen in the future), and getting any of it back is decades away - the benefits of a pension in todays world, with a financial system in one of its most precarious states in decades, and economic crises that look to last decades, the benefits of such pensions are on paper only, and you're taking a risk on that, where it will be decades before you find out what the real story is.

I will never trust my money with such a fund, and I've got work good/secure enough that I don't have to worry about it either.


I'm sure a lot of people espousing the security of a pension to such an uncritical degree, simultaneously go on about a future 'pension timebomb' as well...(not that I put any credence in that)

hmmm

RayM wrote: »

I'll be fairly low-maintenance and will be perfectly comfortable on the state pension.

That's all very well, but some of us aren't so sure there will be much, if anything, of a state pension in 30 years time and we don't like having to be dependent on the Irish government of the day to provide for us.

The sums simply don't add up - unless we tax the young people of that time at 60/70% of their income (and they aren't going to accept this), the money isn't there to give everyone a pension the same as we do at present. Something has to change (probably a reduction in the pension over time, and a longer retirement age).

Michellenman

Have had a pension since I was 24, nearly 26 now so it's not a huge fund but I hope that having started early will help. I'm aware that I'll probably have to take leave if I choose to have children so getting started early will stand to me for that time of being out of the work force.

My employer makes 15% contributions and I can make AVCs if I want but it's not mandatory for employees to contribute. It is mandatory to be in the scheme though. It's a pretty sweet deal I must say.

I work in pensions for a life company too so I see things from the other side, I'm always surprised at how little people know about their pensions though and it's quite frightening how often people will get their annual benefit statement and be shocked that they even have a pension in the first place. What do you think the deduction on your payslip is for?!

KomradeBishop

hmmm wrote: »

That's all very well, but some of us aren't so sure there will be much, if anything, of a state pension in 30 years time and we don't like having to be dependent on the Irish government of the day to provide for us.

The sums simply don't add up - unless we tax the young people of that time at 60/70% of their income (and they aren't going to accept this), the money isn't there to give everyone a pension the same as we do at present. Something has to change (probably a reduction in the pension over time, and a longer retirement age).

The posters stating this about the state pension, are almost invariably the ones who want it gone, because they tend to be the fairly anti-government type anyway.

It's amazing as well, how people think they know how the condition of state pensions will be in 30+ years time (invariably bad, insecure), and of private pensions as well (invariably good, extremely secure; tax benefits! returns above inflation and economic growth!) - it's the usual private good, public bad bollocks, mixed in with the magic ability to see into the future.

If people want a good investment on their efforts, being politically active in bolstering public pensions is probably the single best way to go about it.

Jon Stark

Michellenman wrote: »

I work in pensions for a life company too so I see things from the other side, I'm always surprised at how little people know about their pensions though and it's quite frightening how often people will get their annual benefit statement and be shocked that they even have a pension in the first place. What do you think the deduction on your payslip is for?!

As you said it's mandatory in many places to join the company plan. Many see it as a nuisance, especially if you're a young 20 something.

The reality is that most don't start to give a sh1t about their pension until they get close to the age where they need to Start caring.

That, and often the person looking after the payroll is actually clueless about the ins and outs. Thus, how's anyone meant to have a clue about their pension when the person administering it on their end hasn't a breeze?