Pension Plans - advice and what to go for

Kingp35

(Mods please feel free to move this if in wrong place. I was going to post this in the investment forum but decided it wasnt suited for there)

Ok I have been inspired greatly by this thread
http://82.195.136.36/vbulletin/showthread.php?t=264473

it says that one of the most important things for a young person to do is to start a pension plan. Ill be honest with you I have no idea how to go about this and so Im looking for advice. I think this thread will be good alot of people my age(20) who want to start a plan early.

So all information, recommendations and suggestions are very welcome.

Thanks in advance

PullMyFinger!

I think it would be ok on the Investment board. Try AIB, they do some good deals.

seamus

I reckon Investment is fine for this. Or I could also move it to work if you want.

Kingp35

seamus wrote:

I reckon Investment is fine for this. Or I could also move it to work if you want.

Ok thanks its fine here.

So does anybody have any advice for me to get me started. I think now that im twenty and earning a bit of money that it would be a good time to start thinking about setting up a plan

seamus

For the record, I'm 23 and have no pension plan set up. It's not a major concern. I'm prioritising getting some savings off the ground first for more immediate purchases. It'll probably be another year or two when I'm earning more before I set one up.

nesf

Kingp35 wrote:

(Mods please feel free to move this if in wrong place. I was going to post this in the investment forum but decided it wasnt suited for there)

This kind of thread is more than welcome here.


Hmmm. This is really one of those things I'd personally prefer to talk to a professional about. Nevertheless, I'm sure some people on here will be able to give you some good pointers.

Threads on here don't get replies quickly, so don't worry if it takes some time

defiantshrimp

I have to say I know next to nothing about pensions (being 18 and still a student does that!) but i was looking into Quinn Life's Freeway funds as an investment and they offer the same funds as part of a pension plan. The funds are index trackers and have very low management fees (1% or1.2%) that drop even more after 15 or 20 years (to .5% or .6% I think, but I could be wrong) so over the long term (30+ years) they could be quite profitable as a pension fund. I know nothing about setting one up but no doubt Quinn life would be more than happy to talk to you about it! Check it out http://www.quinn-life.com/

TheLedge

I'm 23 and currently have no pension plan, and I probably honestly won't have one for three years when I eventually move back to Ireland. However, I've just bought a property in Spain, and I kinda see this as a means towards future security.

I'm not entirely convinced about pension funds tbh. Managing my own money is a personal choice that I'm quite happy with for the moment. until I put down roots, and a permanent job, savings(SSIA) & property are my own way forward, plus they're yielding a ridiculous rate of return compared to funds. Funds have been offered to me, but I'm just not that bothered.

garred

I don't have a pension and won't be getting one. The best way to plan for the future......Bricks and Mortar.

RainyDay

The big advantage of pensions is the tax break (or to be more accurate, tax deferral) available to higher rate taxpayers. The significant disadvantage is that your money is tied up until you reach retirement age, regardless of what happens in your life. There is no point in putting money into a pension if you are paying out interest on credit card bills or car loans. Clear your debts (with the exception of a low-interest mortgage) first. The other big disadvantage is the extortionate charges that might apply if you buy a pension through a broker or even your high-street bank.

Those who are convinced that properties are a better investment bet might like to check out the kinds of yields they are getting on their properties before ruling out other forms of investments.

Have a read of the Guide to Savings & Investments before you sign anything.

Kingp35

RainyDay wrote:

The big advantage of pensions is the tax break (or to be more accurate, tax deferral) available to higher rate taxpayers. The significant disadvantage is that your money is tied up until you reach retirement age, regardless of what happens in your life. There is no point in putting money into a pension if you are paying out interest on credit card bills or car loans. Clear your debts (with the exception of a low-interest mortgage) first. The other big disadvantage is the extortionate charges that might apply if you buy a pension through a broker or even your high-street bank.

Well at the moment im only looking at the possibility of setting up a plan I having decided for definite yet thats why I decided to start a thread on it. As for debts I do have a crdeit card but I never have a too high amount of debt on it. I dont have car loans or a mortgage yet but I do plan to get them in the future. I agree that the fact that you cant touch your money until retirement age is definitely a down point to a pension plan but it also ensures that you WILL have this money come retirement age.

Im beginning to think now that I should wait a few years until I am have got myself a car etc before starting to put my money into a fund as I may need this money to fund the likes of a car or deposit on a house etc. Maybe a savings account or something is the best way to go for the time being. This money can be used to fund a pension plan in the future.

Is this a good way to go about things for a 20 year old?

Dr Cox's Ego

I wish I had the cop on to get one when I was 20. Im 28 now and only going about getting one this month. I think Im going to have to play catch up with the amount I put in to make it worth my while.

Does anyone have the Options & Charges Guide of QuinLife to hand? The PDF file wouldnt open for me earlier.

RainyDay

Kingp35 wrote:

Im beginning to think now that I should wait a few years until I am have got myself a car etc before starting to put my money into a fund as I may need this money to fund the likes of a car or deposit on a house etc. Maybe a savings account or something is the best way to go for the time being. This money can be used to fund a pension plan in the future.

Is this a good way to go about things for a 20 year old?

To be honest, I'd concentrate on saving for a house deposit as a first priority. No point in having your pension nest-egg tied up while you are struggling to get yourself onto the property ladder.

defiantshrimp

RainyDay wrote:

To be honest, I'd concentrate on saving for a house deposit as a first priority. No point in having your pension nest-egg tied up while you are struggling to get yourself onto the property ladder.

Unless you think house prices will revert to a lower average over the medium term, then it would be foolish to get in at the peak and be saddled with huge amounts of debt! But there is no reason why you can't do both, put some (a small amount but some) into a pension and save for a house as well.

RainyDay

defiantshrimp wrote:

Unless you think house prices will revert to a lower average over the medium term, then it would be foolish to get in at the peak and be saddled with huge amounts of debt! But there is no reason why you can't do both, put some (a small amount but some) into a pension and save for a house as well.

I wouldn't recommend trying to time to property market when it comes to your home. Over on askaboutmoney.com, I've had many debates with posters over the last 5 years telling me how clever they were by staying out of the property market waiting for the bubble to burst. History has proven all of them wrong. But to be honest, it's not really a question of which way property prices will go. It's a question of the impact of getting it wrong.

If you do buy in just before prices drop, what's the worst thing that will happen? Your mortgage payment will still be the same. If you want to trade up to a larger house, the price of that house will have dropped proportionally too.

But if you opt to stay out of the market, there is a very real risk that you will find yourself priced out of the market and unable to get your first step onto the property ladder. And remember, this isn't an investment we're talking about - it's your home.

If you are buying a property as a home and you can afford the property, buy it. Don't try to time the markets.

nesf

Hmm property bubbles generally "burst" by the house prices not changing much over the short to medium term and inflation causing the actual value of the house to drop rather than the nominal value.

The property market over here is a mess though, there has been close to a 200% increase in house prices over the past 9 years here.

Crazy if you ask me.

I'd put up a more detailed post, except i'm not at home this weekend. Might have something better put together by monday or tuesday.