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I don't know what a pension is

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  • Registered Users Posts: 21,671 ✭✭✭✭ELM327


    The current status of work to 65 (67-68 whatever) and then retire on the state pension is based on the premise that your home is owned and paid off by that age - so that, whilst your incoming cash will be less than the salary you had, your outgoings are less. No commute, no mortgage etc.

    I've realised I'm not going to be able to live on just the state pension, so I've started contributing to an employer based pension at 5% matched contribution, getting 10% of my gross and costing me 3% of my net. It's a no brainer really. I started maybe 3 years ago (36 now) and wish I started earlier. Apparently if you move jobs you can merge pensions with one from the new employer too so you don't need the old style job for life to have a pension either.

    My aim was always to retire while I can still enjoy some good years and cruise the world, have some vintage cars and potter about in my garden. Combining the state pension with a private pension would allow that life.



  • Registered Users Posts: 22,258 ✭✭✭✭endacl


    Fair play



  • Registered Users Posts: 264 ✭✭Jambonjunior


    Sorry I meant to say, is there any posters here that would write about that situation.


    I understand not everyone can afford it.



    But plenty of people I know work in good jobs, with no dependents, and don't put anything away. Just not thinking about the future.



  • Registered Users Posts: 4,790 ✭✭✭griffin100


    I'm lucky (not smug) as I have a pretty good public sector pension. I was lucky enough to get into the PS when the pension entitlements were still attractive. I can retire at 60 or work until 70. The plan is to go at 60ish as by then the kids will be finished college and the mortgage will be paid off. The lump sum i receive along with our plans to downsize the house if needed should give is a reasonable nest egg to work off along with a decent pension. We might also consider moving abroad. The longer I stay the bigger the pension I get, if I stayed until 65 or even 70 I'd have no money worries but I want to have time to enjoy retirement! If needed I can also do some consultancy if needed to supplement income. My wife is self employed and has no pension to speak off, so she will need to save like mad over the next 10-12 years. That said you never know what's around the corner and realistically it's hard to plan past the next 12 months.



  • Registered Users Posts: 1,589 ✭✭✭aero2k


    You don't have to merge the pension on moving jobs. you can just park it and let it continue to grow. Then, once you pass 50 ,you can carry on working but you can access some of it tax free, and invest the rest into an ARF subject to Revenue rules. This might be useful if for example you wanted to pay for kids in college etc.

    If you merged pensions from several jobs into your current employer's scheme then you couldn't access any of that money until you retired.



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  • Registered Users Posts: 12,404 ✭✭✭✭mariaalice


    Almost six in every ten workers (59.8%) had pension coverage in Quarter 3 2019, an increase of just over three percentage points on the same period in 2018. 

    https://www.cso.ie/en/releasesandpublications/ep/p-syi/statisticalyearbookofireland2020/soc/pensioncoverage/



  • Registered Users Posts: 12,404 ✭✭✭✭mariaalice


    nearly 60% of the population have a pension and that's rising, as far as I can see most have them sorted one way or the other or they downsize to live a different life.



  • Moderators, Sports Moderators Posts: 24,586 Mod ✭✭✭✭CramCycle


    I do love the first few posts on PS/CS pensions. Yes the old ones are great but for new entrants in the last few years, my private pension performing badly will likely do better (although not guaranteed). I wish I'd started mine earlier now that I'm older, the cost out of pocket for even a small contribution at 18 will pay dividends at retirement but I can't fix that now. By my calculations, at retirement I'll get a nice lump sum, provided no massive political upheaval, taking into account mortgage paid, no transport (I mainly use PT now anyway) and so on, my take home will be about 70%. Not great but better than many who have nothing but the state or will still be renting, and in that regard I'm very lucky.



  • Registered Users Posts: 1,589 ✭✭✭aero2k


    Following on from CramCycle's comment on wishing he'd started earlier:

    "Someone is sitting in the shade today, because someone planted a tree a long time ago." Warren Buffet

    On joining private schemes - it's good to max out your contribution if there's an employer match and to do so from the first day in the job so you never get used to having the money - that way you'll never miss it.



  • Moderators, Business & Finance Moderators Posts: 10,084 Mod ✭✭✭✭Jim2007


    Oh dear…. You sound like someone living in the 80s or early 90s when a lot of people did do that…. But those days are gone.

    Most people hitting retirement these days are fairly fit, in relatively good health and the last thing they intent to is sit around at home watching the grass grow with you. Servicing the retired sector is big business now - hobbies, travel, sports such as golf, spas etc. retired people are hit with advertising every day and many will take up the offers.

    The German government just announced that over the summer a month pass on German rail will cost 49 Euros and in the coming weeks travel agents will role that into a package targeted at the people who have the time and the money - the retired. Even interrail are targeting them.

    You maybe willing to sit at home in retirement… it’ll be a lonely place.



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  • Registered Users Posts: 12,404 ✭✭✭✭mariaalice


    Thats nonsense

    It would only be correct for the tiny percentage who are renting and only have the state pension before they enter the nursing home, even in old age someone is watching want the other fella and complaining they got more.



  • Moderators, Business & Finance Moderators Posts: 10,084 Mod ✭✭✭✭Jim2007


    Nobody says you have to stay in Ireland… Here in Switzerland, where I live the population is older, but no more than Ireland the cost of living is high and many are making the decision to move to other parts of Europe. Slovenia is very popular as the they have a good healthcare system, nice climate, English is widely spoken and the cost of living is low. So people are selling of their expensive homes in Switzerland as a nest egg to live there. I expect in time Irish people will do the same.



  • Moderators, Business & Finance Moderators Posts: 10,084 Mod ✭✭✭✭Jim2007


    So your strategy is to live on the poverty line in retirement so that if had to go into a hone in later life you won’t lose the pension assets, someone else will spend when you die… does not sound like much of a life.

    The reality is that if you have to go into a home and you need to spend your savings on care, it does not matter because you won’t have the health to do anything else with it. Better to have 15 good years than live frugally I say.



  • Registered Users Posts: 15,176 ✭✭✭✭ILoveYourVibes


    private pensions can be risky though ...people don't know what they are doing ...the last generation ....or the upcoming retirees lost almost everything in the crash....


    You have to save ..AND have a work pension and put stuff into a personal pension AND work out a part time job you can do after retirement ..and have your house paid off.


    Its tough ..some will have to choose between owning a house and having a pension. Like the generation of elderly we had in the 80s many of whom never owned a house.


    You REALLY REALLY need to have ALL Of your debts cleared by the time you hit 50 INCLUDING a mortgage. A lot of people don't realize that either. Because if you get sick or lose your job its much harder to find another.


    Plus you have to keep your marriage together. Because after you are 45 unless you have serious dosh you won't get another mortgage easily unless you have other properties. But they don't want to lend to people who have just had to split their assets.



  • Registered Users Posts: 60 ✭✭Qŵèrþÿ


    You mean 60K take home or before tax?

    Who mentions net pay when discussing salary?



  • Registered Users Posts: 60 ✭✭Qŵèrþÿ


    so most private sector pensions are very little, like 50 euro a week.

    Private sector pensions are roughly paid at 3.5% p/a of your pot.

    If you’re only getting €2,600 p/a (€50/week) it means there’s just over €76,000 in your pot.



  • Registered Users Posts: 1,187 ✭✭✭Viscount Aggro


    You need 1million at least, in a pension fund.

    For people in my social circle, that's the target, some people say 2million, with inflation.



  • Registered Users Posts: 8,830 ✭✭✭893bet


    I have a concern that at some point, the government will look and do the “you were wise, and have a private pension, well done……you don’t need the state one so we will give it to someone who does”.


    In the same way job seekers gets means tested at a point. Oh well done for saving. You can use all that before we give you anything. Rewarding those who perhaps “wasted” all their money and punishing those who put a little away.



  • Registered Users Posts: 10,738 ✭✭✭✭Furze99


    Just saying Jim that the essence of the 'Fair Deal' scheme as experienced in our case, is that it seeks to make those who have assets like pensions and property to pay full whack, whilst those who don't are still looked after. That's how it seems to work.

    It's a big generational change in my lifetime. Formerly elderly were more likely to live with adult relatives and the transfer of wealth was more direct from one generation to to the next. Now people go to nursing homes and a much higher proportion of the wealth they accumulate goes back into the economy and state coffers.



  • Registered Users Posts: 60 ✭✭Qŵèrþÿ




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  • Registered Users Posts: 4,814 ✭✭✭Deeec


    Sadly that is the reality if you want a reasonable pension on retirement. €1M is not possible for the vast majority of the population though.



  • Registered Users Posts: 6,083 ✭✭✭Trigger Happy


    The thought of living off a state pension at retirement scares me.

    In my case I reckon, at today's rates, I would spend 4000 pa on energy, home insurance and property tax. Another 2000 pa for car tax/insurance/fuel. Health insurance is about 1000 I think. Another 1000 pa for tv/broadband. That's 8000+ gone just to keep things going.

    That leaves €16-17 per day for everything else if depending on the state pension.

    To hell with that. I will keep contributing to my private pension and give myself a bit of comfort when I retire,



  • Registered Users Posts: 1,589 ✭✭✭aero2k


    Like Kenzie Dirty Napkin, even as a young kid I remember my father banging on about the importance of a pension. Unfortunately he died too young to ever see any of it, however his county council pension kept the show on the road for my mother and the eight of us, and I think my mother actually got more money from the Co. Co. over the rest of her life than he ever did while he worked there.

    I suppose what I'm saying it it's important to balance saving for retirement with the importance of enjoying the present as well.



  • Registered Users Posts: 4,814 ✭✭✭Deeec


    I seen this first hand with an elderly relative - they scrimped and saved all during their life to build up a pot for their old age. They had to go into a home and a high percentage of their savings and assets from frugal living went to the HSE. In the same nursing home there was people who lived a great life and had nothing - no real assets, pension or savings - they got the exact same care as my relative.

    My relative would have been better off not saving and living the good life - his last years would have been the same had he €1M or €0.



  • Moderators, Business & Finance Moderators Posts: 17,666 Mod ✭✭✭✭Henry Ford III


    With 30 years of growth and contributions to go it's a start.



  • Registered Users Posts: 60 ✭✭Qŵèrþÿ


    I have a concern that at some point, the government will look and do the “you were wise, and have a private pension, well done……you don’t need the state one so we will give it to someone who does”.

    If they do do that, then I hope the PRSI aspect of teachers’ pensions and other public sector workers is also means tested.

    The PRSI aspect is incorporated into ps pensions, so if they means test ours then it’s fair and just that public sector pensions are accordingly reduced.



  • Registered Users Posts: 65 ✭✭Drifter100


    Very true and a reality check. The stats bear out the problems coming up the road for the country that we live in and the fact that we have an aging population where only 60% have private pensions. Look around you if you are out and about daytime and see the amount of people floating about of a pensionable age, filling time in. The other stat that is looming larger and lager is the amount of people approaching pensionable age who don`t own their own home. These people will have to be looked after by the state one way or another.



  • Registered Users Posts: 60 ✭✭Qŵèrþÿ


    DB pensions in the public sector need to be abolished.

    Anyone who’s on one now should be paid a large lump sum into a DC scheme and leave them to it.

    That’s what they did in my workplace. It didn’t affect me but the more senior staff were affected. They were all on DB schemes, our workplace abolished it and put them all on DC schemes but paid a lump sum to compensate. I started on the DC schemes.

    We should do the same here with our public sector.



  • Registered Users Posts: 2,968 ✭✭✭Francis McM


    We cannot all work for the county council or the government though. It is ironic that the taxes the private sector collect and pay go towards fantastic pensions for those who work for the government, while those in the private sector generally cannot afford decent pensions / usually end up with a tiny pension by comparison.

    Yes, we know the average pension pot of public servants is worth close to a million if you were to buy it. However most people in the private sector cannot afford, after paying all the other bills and expenses and cost of living, to put a million in to a pension. Dream on.

    Good point, with a left wing government in the future strapped for cash I reckon this will likely happen. After all, did not another Irish government raid pension funds about 12 years ago? Just one or 2 percent but still? And in Greece the government there took some or all savings over 50k?



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  • Registered Users Posts: 8,421 ✭✭✭RedXIV


    I need to get back on the pension thing. I did it pretty aggressively for about 5 years but then a combination of 4 kids in school, saving for a house and swapping jobs, I let it lapse the last few years. I'm convinced if I can just get the house part sorted, I'll be able to start squirreling away more money again as that's definitely been the toughest saving we've ever done but I'm also aware that if it all goes to plan, and I get a house this year, I also then have the eldest leaving school and I'm sure that's gonna cost me too.

    Obviously though the MAIN plan is to die before I need the pension :D



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