Pension - no clue need advice

wally1990

Hi all

I’m 27 (28 soon) and wanting to start saving into a pension

My query is if I start contributing into a fund , is there methods/ways to keep an eye on the growth and potential returns throughout the course of the term?

The plan is to save for next 40 years

I am wondering what access to the financials can I see and what funds etc do I have control over (if any) on how where my money is invested for ROI

Anyone have any advice / info ?

srsly78

Yes most of them offer some kind of web-based tool showing this information. Also you will get it on paper once a year. You can broadly choose how your funds are allocated.

Atlantic Dawn

You will receive an annual benefit statement which will give projections of what your fund will be worth as a pension when you reach retirement age. As said some will also offer online tools to see current performance.

Most companies will offer a default investment strategy where they will choose what funds to invest in, you can though choose your own which might offer a potentially higher rate of return with a higher risk.

draiochtanois

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Gwen Cooper

I can relate to the title of this thread - I also have no clue and need advice.

I'm nearly 30 and want to start a pension plan. Unfortunately for me, I have a very poor understanding of finances in general, no matter how hard I try to understand it.

From what I read so far, I gathered that whoever I have a pension plan with invest my money somewhere. How risky is it? They say that there is a small risk, but just how small? And anybody can give me any tips what to look out for?

I'm really clueless when it comes to this. I don't even know what would be the right monthly amount to pay and I don't understand the slide charts.

I thought I will talk to someone, but I'm worried that I won't be asking the right questions and that I will sign up for something without recognizing any red flags.

Any tips for some reliable sources would be much appreciated

srsly78

There is no such thing as zero risk. If armageddon happens losing your pension will be the least of your worries tho.

Gwen Cooper

srsly78 wrote: »

There is no such thing as zero risk. If armageddon happens losing your pension will be the least of your worries tho.

I understand that and I'm not looking for a zero risk. I'm simply asking if anyone knows how big the risk is, or how often these things happen. Basically what are the odds that I will never see my money again.

As for Armageddon, I'm still hoping for it, however all the Ends of the world didn't work out in the last years, time to look for Plan B

srsly78

Different funds have different risk ratings, pension companies offer lots of information about this.

Here is one example: https://www.friendsfirst.ie/fund-centre/fund-range/

draiochtanois

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Henry Ford III

draiochtanois wrote: »

This post has been deleted.

Rather sweepingly generalised.

wally1990

draiochtanois wrote: »

Does your employer match your contributions?
For example some match up to 7%

Yes
They will match to 5%

I am going to take one out soon and I would like to get an understanding of the rating system and where it is invested to

In simple terms , I am giving an investment company my hard earned money :P and I want to ensure that it is used wisely (or I chose non risky to medium risky funds) but I need a better understanding of their rating systems before I choose this

Like this is our life savings etc for retirement so I want to be confident or have some peace of mind

I am planning on saving 15% of my annual gross salary and increase that as I get older

I am interested in the financial side of things ( I appreciate others aren’t )

I want to understand what Bonds , equity funds and how these operate and (mean) etc my money will be invested in to return a potential growth

I understand as the above poster mentioned there is riskier portfolios and these are graded/measured so I need to understand this at a basic level

I will speak to a QFA on this

I am interested to see the current fund then and it’s performance which another poster mentioned Is possible so that’s great for me !

The J Stands for Jay

Gwen Cooper wrote: »

Basically what are the odds that I will never see my money again.

The odds of ending up with nothing are pretty close to zero.

Liam D Ferguson

Gwen Cooper wrote: »

I understand that and I'm not looking for a zero risk. I'm simply asking if anyone knows how big the risk is, or how often these things happen. Basically what are the odds that I will never see my money again.

Typically an Irish Managed Pension Fund invests in several hundred different things. Shares, government bonds, corporate bonds, property, cash deposits. Given that they are pension funds and the bigger ones are into the billions in size, they will rarely invest in small start-up company shares. The bigger ones will mostly only invest in well-established businesses - well-known names - McDonalds, Apple, Microsoft etc. Could all of these companies be wiped out at the one time? It's theoretically possible but highly unlikely. Could a few of the investments within a fund be wiped out? Certainly. But if it only represents a few percent of the fund as a whole, it won't be catastrophic for your fund. Can such funds drop in value? Yes, and they WILL from time to time. During the last big crash - 2008 - the average Irish pension fund dropped by around 30% in a single year. The recovery began in Spring 2009 and within a few years such funds had recovered far beyond this.

The Pensions Authority have a few decent starter guides for anyone wanting to start from scratch.
https://www.pensionsauthority.ie/en/

Gwen Cooper

Liam D Ferguson wrote: »

Typically an Irish Managed Pension Fund invests in several hundred different things. Shares, government bonds, corporate bonds, property, cash deposits. Given that they are pension funds and the bigger ones are into the billions in size, they will rarely invest in small start-up company shares. The bigger ones will mostly only invest in well-established businesses - well-known names - McDonalds, Apple, Microsoft etc. Could all of these companies be wiped out at the one time? It's theoretically possible but highly unlikely. Could a few of the investments within a fund be wiped out? Certainly. But if it only represents a few percent of the fund as a whole, it won't be catastrophic for your fund. Can such funds drop in value? Yes, and they WILL from time to time. During the last big crash - 2008 - the average Irish pension fund dropped by around 30% in a single year. The recovery began in Spring 2009 and within a few years such funds had recovered far beyond this.

The Pensions Authority have a few decent starter guides for anyone wanting to start from scratch.
https://www.pensionsauthority.ie/en/

That's a great explanation, and thanks for that link! I didn't even know that there's a pension authority in this country, or in any country really. So much to learn, so little time.