Why are people obsessed with getting a pension

Henry Ford III

Given that the max. pension at nrd is 2/3 of final salary (before tax free lump sum) I think it's quite reasonable to expect to live fairly well on 50% of pre retirement earnings. Your mortgage for example will (should) be paid off and your financial commitments should be way less.

There's plenty of people who would happily jump at that opportunity.

The J Stands for Jay

Henry Ford III wrote: »

Given that the max. pension at nrd is 2/3 of final salary (before tax free lump sum) I think it's quite reasonable to expect to live fairly well on 50% of pre retirement earnings. Your mortgage for example will (should) be paid off and your financial commitments should be way less.

There's plenty of people who would happily jump at that opportunity.

Plus, when you're older (can't remember the age) you pay less tax. 50% of gross earnings will be closer to 2/3 net.

2Mad2BeMad

Just a quick question here folks, would be hoping for a pm maybe, didn't want to start a whole new thread.
I'm looking to set up my own pension (currently 26) and im in the process of saving for a mortage (10percent saved but need more) so it will initially be small contributions most likely only 100-200 a month for the first 2-3 years.
Who should I go with? the company I work for only provide the standard pension (PRSA?) and they don't contribute anything towards it.

Should I be looking at going with someone like zurich/aviva/irish life?

I would want it to be invested into high risk and be gradually brought down the older I get.
But every website I look at theres so much information I'm abit overwhelmed.

I've got onto pensionadvice.ie and they said they will contact me on monday but im not sure how to even begin wording what I want.

Henry Ford III

2Mad2BeMad wrote: »

Just a quick question here folks, would be hoping for a pm maybe, didn't want to start a whole new thread.
I'm looking to set up my own pension (currently 26) and im in the process of saving for a mortage (10percent saved but need more) so it will initially be small contributions most likely only 100-200 a month for the first 2-3 years.
Who should I go with? the company I work for only provide the standard pension (PRSA?) and they don't contribute anything towards it.

Should I be looking at going with someone like zurich/aviva/irish life?

I would want it to be invested into high risk and be gradually brought down the older I get.
But every website I look at theres so much information I'm abit overwhelmed.

I've got onto pensionadvice.ie and they said they will contact me on monday but im not sure how to even begin wording what I want.

I was going to suggest you contact a Broker, who does this stuff daily and will do the leg work for you, but you've already done so.

They are obliged make recommendations and justify them.

They aren't free, but a good one should be worth the cost in terms of added value. Any fees/charges/commissions must be disclosed.

AndrewJRenko

2Mad2BeMad wrote: »

Just a quick question here folks, would be hoping for a pm maybe, didn't want to start a whole new thread.
I'm looking to set up my own pension (currently 26) and im in the process of saving for a mortage (10percent saved but need more) so it will initially be small contributions most likely only 100-200 a month for the first 2-3 years.
Who should I go with? the company I work for only provide the standard pension (PRSA?) and they don't contribute anything towards it.

What's the standard PRSA that they offer? What choice of funds do you have? What fees apply?

S.M.B.

Henry Ford III wrote: »

Given that the max. pension at nrd is 2/3 of final salary (before tax free lump sum) I think it's quite reasonable to expect to live fairly well on 50% of pre retirement earnings. Your mortgage for example will (should) be paid off and your financial commitments should be way less.

There's plenty of people who would happily jump at that opportunity.

50 - 66% of pre retirement wages is a pretty common goal, I don't think anyone is suggesting people need to accumulate millions to enjoy in your old age.

It's important to have a plan on how you reach that target and for some it's contribute often and early and for a few others it's contribute a sizeable portion when you reach a stage in your life where you're doing well financially well.

And for those who don't own property (more and more including me may be in this position) it's important to have additional funds.

snoopboggybog

Jim2007 wrote: »

Given that you'll have more on time on your hands and less responsibility at 60, do you think it is possible you might actually want to do more of those things, rather than less?

A match used to be go Friday evening or Saturday morning and be back for work on Monday... now we usually go on Thursday, sight see on Friday, may be take in a concert if we're in London, match Saturday, lazy day Sunday and home Monday afternoon... or may be Tuesday, depending on the mood.

You won't suddenly want to do less of the things you enjoy, when you retire and have the time, you'll want to do more, especially early on when you are in good health.



Do you think dreams and ambitions stop when you are 60, that all you'll want to do is sit around and watch the grass grow?

Even wanting to be able to help a son or daughter out buying a house, helping with grand kids education, or leaving something in a will requires savings...

When you are 17 you have few responsibilities and no money, when you are 60 you have few responsibilities and money... most people see it as an opportunity to follow their dreams, not sit around and be board for 20 years or more.

At the end of the day it is your life, but I recon you will not be happy to sit at home while your mates go to that AC Milan match, the hiking holiday in the Jura or whatever is popular then...

2000 a month with the state pension would honestly do me fine, I can do whatever I want with that.

Don't need anymore

The J Stands for Jay

snoopboggybog wrote: »

2000 a month with the state pension would honestly do me fine, I can do whatever I want with that.

Don't need anymore

€437 a week. Doable, but wouldn't be living large.

anewme

McGaggs wrote: »

€437 a week. Doable, but wouldn't be living large.

If you normally take home 3200 month but pay 1200 on mortgage (which will be gone) then you are no worse off.

To take home 3200 you’d be earning 50k or more probably. Many workers earn less than that. Pay mortgage, live and pay pension.

Plenty of pensioners don’t have that much either.,

2Mad2BeMad

Henry Ford III wrote: »

I was going to suggest you contact a Broker, who does this stuff daily and will do the leg work for you, but you've already done so.

They are obliged make recommendations and justify them.

They aren't free, but a good one should be worth the cost in terms of added value. Any fees/charges/commissions must be disclosed.

Ya I contacted them, awaiting a call back but if the cost of it plus fees severely outweighs my contributions should I wait until I can contribute more? or does that even make sense :pac:
I would rather sit down with a broker and figure it out but sadly my timing could not be worse due to the current situation. Hopefully he explains it well over the phone.

AndrewJRenko wrote: »

What's the standard PRSA that they offer? What choice of funds do you have? What fees apply?

I've no idea I asked my boss does he have a company one set up, he doesn't.
He said he legally has to provide me a PRSA one but I did'nt get into anymore with that seen as how if he is not going to contribute (which he is perfectly entitled to do) then I may as well source my own pension to which I can possible control. At least then I can make my own judgement if its right for me rather then my boss setting one up for me.

Again its abit of information overload for me so I could very well be doing this wrong and my boss would be the best option for my.

But I'm looking for mid-high risk for the first few years to make my smallish contributions work as best they can until im in a position to contribute more then I will gradually lower it.

GreeBo

Henry Ford III wrote: »

Given that the max. pension at nrd is 2/3 of final salary (before tax free lump sum) I think it's quite reasonable to expect to live fairly well on 50% of pre retirement earnings. Your mortgage for example will (should) be paid off and your financial commitments should be way less.

There's plenty of people who would happily jump at that opportunity.

Yep, but that only happens if you put the money in all along.

GreeBo

snoopboggybog wrote: »

2000 a month with the state pension would honestly do me fine, I can do whatever I want with that.

Don't need anymore

The current state pension... And the age that starts kicking in is getting older and older. I hope you have a job that you can keep doing at 68+
And I hope the state pension stays that high and that your mortgage is paid off and you have no serious illness.

Hebe you thought about how you will spend your days when you won't have work to do? Would you not expect your leisure expenses to increase from what they are today? Everyday is a weekend when you retire remember

snoopboggybog

McGaggs wrote: »

€437 a week. Doable, but wouldn't be living large.

Could still afford a trip to the states every month.
Could afford to live in Spain during Summer months or permanently.

I don't get what you mean by living large? Having a fancy BMW or something in the drive way?

GreeBo

snoopboggybog wrote: »

Could still afford a trip to the states every month.
Could afford to live in another country.

I don't get what you mean by living large? Having a fancy BMW or something in the drive way?

What are your current weekly outgoings?
Food, gas, electricity, TV, broadband, mobile, car tax, insurance, house insurance, petrol, cigarettes, alcohol, TV licence, lpt, NCT, health insurance

Doesn't seem like there would be much left out of that 400.

Not sure how you are getting to the States every month... Or how you are eating while over there?

Excluding mortgage & motoring expenses (neither are huge anyway) I spend under 1000/month.

That includes health insurance, home insurance & critical illness cover etc etc.

Now I throw a decent wedge into a pension as its lunacy not to.... But I expect the bulk of my retirement cash shall go to my estate (I won't be going annuity route unless I lose my marbles)

Jim2007

snoopboggybog wrote: »

2000 a month with the state pension would honestly do me fine, I can do whatever I want with that.

Don't need anymore

Well unless you are expecting to retire in the next 10 years, you can expect to see a revision to some kind of version of the European three pillar system. Meaning the state pension will weak and unlikely to do you for more than a few months expenses.

anewme

Augeo wrote: »

Now I throw a decent wedge into a pension as its lunacy not to.... But I expect the bulk of my retirement cash shall go to my estate (I won't be going annuity route unless I lose my marbles)

I suppose it does depend also on if you want to leave anything.

I don't want to leave an Estate, hence I only want to accumulate what I will spend in this lifetime. Ideally, 2.5k, few hundred grand savings should see me out. After that, don't care really.

GreeBo

Augeo wrote: »

Excluding mortgage & motoring expenses (neither are huge anyway) I spend under 1000/month.

That includes health insurance, home insurance & critical illness cover etc etc.

Now I throw a decent wedge into a pension as its lunacy not to.... But I expect the bulk of my retirement cash shall go to my estate (I won't be going annuity route unless I lose my marbles)

Don't forget that your discretionary spending is going to increase
You are going from 2 days off to 7 days off a week. They are going to have to be filled somehow.

I'm not saying that you can't live frugally btw, I already do now, but it's a choice, my choice, and I want it to stay that way.

GreeBo

anewme wrote: »

I suppose it does depend also on if you want to leave anything.

I don't want to leave an Estate, hence I only want to accumulate what I will spend in this lifetime. Ideally, 2.5k, few hundred grand savings should see me out. After that, don't care really.

But why savings versus a pension?
You do don't need to leave an estate, but it's far cheaper to have a pending of a few hundred grand than personal savings.

And it means you will have more disposable income now.

anewme

GreeBo wrote: »

But why savings versus a pension?
You do don't need to leave an estate, but it's far cheaper to have a pending of a few hundred grand than personal savings.

And it means you will have more disposable income now.

It wont, I'm not saving at the moment Savings are what I already have and put aside plus a few bob coming to me, plus the pension lump sum.

Can't pay any more into pension with mortgage etc. That's back to my point about what you will actually need when you retire.

For a single person, it is about living now, enjoying retirement, but leaving as little as possible to the taxman.

Hard to balance.

GreeBo

anewme wrote: »

It wont, I'm not saving at the moment Savings are what I already have and put aside plus a few bob coming to me, plus the pension lump sum.

Can't pay any more into pension with mortgage etc. That's back to my point about what you will actually need when you retire.

For a single person, it is about living now, enjoying retirement, but leaving as little as possible to the taxman.

Hard to balance.

If those current savings are for your own "pension" and you aren't going to touch them, then start using then to pay your mortgage and out the mortgage into s pension.

anewme

GreeBo wrote: »

If those current savings are for your own "pension" and you aren't going to touch them, then start using then to pay your mortgage and out the mortgage into s pension.

Not sure if that's the right move for me. Investments can fall as well as rise but you can see the mortgage decreasing.

I believe in balancing risk, not willing to pay any more into Pension at the minute, especially seeing the massive ups and downs recently.

Im pretty risk adverse with money and seeing 50K come off the pension is scary!

Liamo57

I took advantage of a redundancy scheme lst year. 200,000 euro redundancy, pension and 9 months jobseekers benefit. I now have a part time Goverment job and my pension. I was never as well off at 62. I count my blessings as the kids are reared and the mortgage is long paid.

anewme

Liamo57 wrote: »

I took advantage of a redundancy scheme lst year. 200,000 euro redundancy, pension and 9 months jobseekers benefit. I now have a part time Goverment job and my pension. I was never as well off at 62. I count my blessings as the kids are reared and the mortgage is long paid.

Fair play! Enjoy.

A redundancy payout at the right stage can be better than any savings.

Kilboor

Don't trust the future generations to keep the current social-capitalist system we have (unfortunately and I say that as someone who is working up the ladder from basically nothing). As a 25 year old I see paying into a pension as a waste of money, I think the risk of us living in some sort of authoritarian communist system of equal distribution of wealth is a high possibilty and I'd rather work my savings out with decade goals in mind then have my hard earned money taken from me when I spent my life saving for it.

GreeBo

anewme wrote: »

Not sure if that's the right move for me. Investments can fall as well as rise but you can see the mortgage decreasing.

I believe in balancing risk, not willing to pay any more into Pension at the minute, especially seeing the massive ups and downs recently.

Im pretty risk adverse with money and seeing 50K come off the pension is scary!

Maybe, but seeing 50k go back on is better than your savings dwindling away to dirt and inflation in the bank.

You don't have to put it in crazy funds, hell you could put it into s cash fund but you are missing out on the tax relief which is crazy. It's free money.

Edit to add
You can also see 50kb come off your house value pretty quickly

GreeBo

Kilboor wrote: »

Don't trust the future generations to keep the current social-capitalist system we have (unfortunately and I say that as someone who is working up the ladder from basically nothing). As a 25 year old I see paying into a pension as a waste of money, I think the risk of us living in some sort of authoritarian communist system of equal distribution of wealth is a high possibilty and I'd rather work my savings out with decade goals in mind then have my hard earned money taken from me when I spent my life saving for it.

Translation: I'll let some other sucker pay for my retirement.

Btw it's s pretty shoddy Communist regime that steals from your pension but let's you keep your savings...

Kilboor

GreeBo wrote: »

Translation: I'll let some other sucker pay for my retirement.

Btw it's s pretty shoddy Communist regime that steals from your pension but let's you keep your savings...

Your translation is my worry. I'd rather use my own savings to live and have the Government tax me less.

I didn't say I want someone else to pay for my pension? I said I'm saving with decade goals in mind, I'm not saving for retirement when 65. My savings goals are based on every few years and I reassess the situation at those years.

GreeBo

GreeBo wrote: »

Don't forget that your discretionary spending is going to increase
You are going from 2 days off to 7 days off a week. They are going to have to be filled somehow.

I'm not saying that you can't live frugally btw, I already do now, but it's a choice, my choice, and I want it to stay that way.

Yes, I mentioned I'm throwing a decent wedge into a pension.

That accepted I don't need all my income and I don't expect to need all of my pension all going to plan & presuming I get to 50 odd

GreeBo

Kilboor wrote: »

Your translation is my worry. I'd rather use my own savings to live and have the Government tax me less.

I didn't say I want someone else to pay for my pension? I said I'm saving with decade goals in mind, I'm not saving for retirement when 65. My savings goals are based on every few years and I reassess the situation at those years.

Why do you think they will tax your savings less than your pension though (in your communist future)

You know pension contributions are tax free right right now yes?