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Why are people obsessed with getting a pension

Midlife crisis man

What's the point having one.

About myself: I don't have a pension. I came from a poor background and was never thought about the importance of financial awareness.

I struggled throughout the recession eventually going back to college. I'm in my mid 30s now recently started working in the public sector. I'm only on 25k per year. I'm not entitled to the public sector pension because I'm on a fixed term "trainee" contract in my field.

Also if I happen to stay in the public sector for the rest of my career I won't be long enough to get the cushty 40 year pension anyway.

So, in the next 30 years the retirement age will probably be closer to 70. Why save the bollox off myself just so I have a bit of cash when I'm an auld fella with (best case scenario) 10 years of life left. Who needs that much money at that age. Am I missing something here? You can't take it with you when you die.

I'm sure I'll have a good bit of regular savings by then but what's with the obsession of pumping as much money as you can into a pension (that'll end up getting raided by the government in subsequent recessions anyway)

I'm going to enjoy my money while I have health and vigour and the government can look after me when I'm an auld boy.

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Pussyhands

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

Steer55

Pussyhands wrote: »

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Why not, you will have more time to watch it.

witchgirl26

Pussyhands wrote: »

If I had a free house today I could live off 250 a week for sure.
Even people on the dole who rent go on holidays.
I have yet to see a 70 year old who is as picky with quality/condition as young people. I can't see myself spending big money when I'm 70 on cars, holidays etc.
I don't even do that now!
In any case I have my private pension for now....I can always cancel it after 10 years I suppose.

Really? Coz I see my mam who has a little bit more than that and a "free" house and it's not that easy. You still have to pay gas, electricity, repairs, upkeep, house insurance etc. Not to mention any unexpected things that might crop up. And that's just on the house.
Cars cost money so there's fuel to consider. Plus car insurance, nct, tax and ensuring you have money in case the car breaks down.
My mam doesn't spend big money on cars or holidays but things cost. Her car cost less than €15k however that's a huge amount when you're a pensioner. She needed something automatic as she has arthritis in her hands so therefore finds changing gear continuously quite hard on them. She didn't go for some mad top of the range thing but she wasn't buying some banger that would end up costing her more.
Her biggest holiday since being retired has been to the UK but it still costs money. As does any hobbies etc.

Personally I want a nice quality of life when I'm retired so that's why I'm putting money into a pension. I don't want to just exist but to enjoy it.

lawred2

Addle wrote: »

How do you/will you pay for a roof over your head?

me and you will pay for it

and his pension

sweet deals all round

.......

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Thats 250 quid per week. Even in the depths of winter my gas bill is only about 250 bimonthly.

Youd also be getting the Household Benefits Package once you were over 70. And the GP card. And free travel. Why would you need to run a car?

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Eric Cartman

Pussyhands wrote: »

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

a lot of pensioners now are the last ones on super cushy defined benefit pensions. Theyre a lot more well off than our parents will be when they come to collect.

witchgirl26

Pussyhands wrote: »

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

Why would heat be cheaper? Do you mean the allowance? Do you know how much that is under the Household Benefits? €35 a month on either gas or electricity. That's it. Good luck heating your house for that.

And why wouldn't you be having them? You'll have more time to enjoy them.

You'll probably find a lot paid into pension pots actually. My dad paid into the "widows and orphans" fund as a teacher. My mam has a private pension (albeit very small) from being a nurse.

witchgirl26

....... wrote: »

Thats 250 quid per week. Even in the depths of winter my gas bill is only about 250 bimonthly.

Youd also be getting the Household Benefits Package once you were over 70. And the GP card. And free travel. Why would you need to run a car?

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

.......

witchgirl26 wrote: »

Why would heat be cheaper? Do you mean the allowance? Do you know how much that is under the Household Benefits? €35 a month on either gas or electricity. That's it. Good luck heating your house for that.

Is that 35 euro per month winter AND summer?

Because while my gas bill is about 125 per month in the winter, its virtually nothing in the summer.

In my last property (an apartment) my heating bills were very low as I didnt lose much heat at all once it had been on for an hour - so if I went back there on retirement, 35 euro per month (if it was all year round) might cover the heating entirely for the year.

.......

witchgirl26 wrote: »

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

I have done this very thing up quite recently for my father in law and the conclusion we came to was that if he downsized into a place that cost much less to heat he could even keep his car running and itd be grand. There are a range of benefits available for people who have very low income. The biggest issue for him on a fixed income is when the government suddenly introduce new costs (like property tax).

Nursing homes are available thru Fair Deal without savings. Very few people could afford really nice nursing homes unless they were very wealthy. They are over 1k per week, most ordinary punters wont have that.

witchgirl26

....... wrote: »

Is that 35 euro per month winter AND summer?

Because while my gas bill is about 125 per month in the winter, its virtually nothing in the summer.

In my last property (an apartment) my heating bills were very low as I didnt lose much heat at all once it had been on for an hour - so if I went back there on retirement, 35 euro per month (if it was all year round) might cover the heating entirely for the year.

Yes it's €35 a month. But that's just against either your gas or electricity. Not €35 against both.

While I agree it could cover a lot during the summer months, the winter last year cost a lot of people a lot in heating and electricity with the cold weather. And it depends on how energy efficient your boiler is.

PhilOssophy

The reason pensioners are doing grand is they were super savers years ago, not because they are minted on DB pensions. My parents are a cast-iron example of this, they saved like crazy to raise us and never wasted a cent. Once we were raised, they didn't change the habit and now are cushy as anything.
They still need to pay the bills though.....

witchgirl26

....... wrote: »

I have done this very thing up quite recently for my father in law and the conclusion we came to was that if he downsized into a place that cost much less to heat he could even keep his car running and itd be grand. There are a range of benefits available for people who have very low income. The biggest issue for him on a fixed income is when the government suddenly introduce new costs (like property tax).

Nursing homes are available thru Fair Deal without savings. Very few people could afford really nice nursing homes unless they were very wealthy. They are over 1k per week, most ordinary punters wont have that.

That's assuming he's happy to move out of his home. A lot of people don't want to move if they're living in a community they know and are comfortable in.

Fair Deal can be great but don't forget, it takes into account all of your assets and savings and some people just don't qualify. I've seen it with elderly relatives of my mam's.

malinheader

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

After paying their mortgage some young couples will have less than this to manage on.

.......

witchgirl26 wrote: »

Yes it's €35 a month. But that's just against either your gas or electricity. Not €35 against both.

While I agree it could cover a lot during the summer months, the winter last year cost a lot of people a lot in heating and electricity with the cold weather. And it depends on how energy efficient your boiler is.

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

witchgirl26

....... wrote: »

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

That's a lot of compromises to have a "reasonable existence" though. Sharing with a stranger in a home you're not familiar with that is smaller just to get by? Nah I think I'll stick with my private pension.

Plus no guarantee there will be a state pension in the future or it's level. That's the problem.

[Deleted User]

witchgirl26 wrote: »

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

.......

witchgirl26 wrote: »

That's a lot of compromises to have a "reasonable existence" though. Sharing with a stranger in a home you're not familiar with that is smaller just to get by? Nah I think I'll stick with my private pension.

Plus no guarantee there will be a state pension in the future or it's level. That's the problem.

I was actually thinking of sharing with one of my existing friends who was also in the same boat, I often plan it with my bestie, she reckons we can live together in a smaller house, drink cheap booze from LIDL and watch old movies on Netflix all day long and take up smoking again in our 80s

argolis

OP even if you could realistically get by on just the state pension, it only starts paying out at the age of 67 or whatever it is now.

Why not save money in a pension and retire earlier, like 60, or even 55 if you were lucky?

It mightn't sound like much, but if you could finish up even one year early at the end of your career, would you not want to?

Heres Johnny

Pussyhands wrote: »

Heres Johnny wrote: »

Basically if you are on 20k or so a year working then the drop in lifestyle when you just get the old age pension is not going to be huge and you probably can't afford to pay into a personal pension anyway.

If you are on 60k and enjoy spending it and don't put anything away the shock of dropping to 12k would be massive.

Remember this is yourself you're saving for, not a complete other person.

I'm retiring, or at least partially, at 60 the year my mortgage is due to finish. I've been in a pension fund since I'm 24 and it's worth a hell of a lot more than I've put in in those 14 years.

Never listen to someone that doesn't have one, they know they should be planning for the future and often don't want anyone else to either.

I'd be like that. I earn 45k but my lifestyle is probably the same as someone on 25k or similar. I'm saving loads for a mortage and I don't have lavish lifestyle.

I have a pension through work though. One thing though, I can't access it until I reach retirement age. I wish I could access it earlier if I wanted, I could retire earlier

You can get that from 50 years of age.

[Deleted User]

Massive tax breaks for pension. It's a no brainer.

There's also a tax free lump sum of up to 200k at pension age that can be availed off.

Steer55

We will have an older population but its not as bad as the UK and some other EU countries We also have a high amount of young people coming in from the EU to live and work in ireland, they in turn will pay taxes, prsi etc so its not all doom and gloom.

BailMeOut

Pension rules in Ireland are very generous. If you do not have a pension start one now and you need your head examined if you think not securing your old age is good idea. Setting up and self managing a PRSA is easy and you become very market aware and savvy very quickly when you do this. The tax benefits are really good in ireland, you can do lifetime contributions up to €2m (I think) and the amount you can contribute (tax free) increases as you get older. If you are young then it is a bigger no brainer as the small amounts you contribute each month have the advantage of time and a long vesting period to grow into a very nice nest egg. If you get matching contributions from your employer (free money) and still do not setup a pension then my goodness you are really stupid.

hmmm

Heres Johnny wrote: »

Never listen to someone that doesn't have one, they know they should be planning for the future and often don't want anyone else to either.

This. They're a bit like the anti-vaccers, all full of certainty about something they really know very little about, and giving people absolutely terrible advice.

The easiest way to start saving for a pension is to do it young, and put part of your pay increases in when you get them. Then you won't have to cut back on your lifestyle because you'll never have had it in the first place.

Jim2007

Steer55 wrote: »

We will have an older population but its not as bad as the UK and some other EU countries We also have a high amount of young people coming in from the EU to live and work in ireland, they in turn will pay taxes, prsi etc so its not all doom and gloom.

Try and map your highly optimistic expectation against the demographic reality and forecasts there of. For a start you can't have young people coming into take over the burden, if the rest of the states are in the same or a worse position. By then the pyramid will have flipped and the social requirements will have grown exponentially so even if you were able to sustain the current workforce levels the tax and social security burden would be much greater.

Jim2007

Deleted User wrote: »

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

You are talking about, while the state easily has more revenue to provide social services that it will have in say thirty or forty years time.... I won't even address your sense of self entitlement, but suffice to say it will not matter, because the resources will simply not be there.

Jim2007

....... wrote: »

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

When you get to that age you will realise how wrong you were. Old people in general find it very difficult to make big adjustments to their lifestyle. And you are intending to maximise those changes when you are at the point in your life where you are least likely to be able to handle it. And of course you are assuming you'll have the health to be able to do it.

The current generation of pensioners in Switzerland are probably the worst hit because they are the cross over generation - the last ones to depend entirely on state pension. And I can tell you, I do not want to have to live like that, one of my neighbours is in that situation. They can afford to share a beer between them on Tuesdays and Thursdays, meat a couple of times a week, usually mince in some kind a pasta dish, the only time they get to go to a restaurant is on my birthday when we invite them to the local restaurant down the road. Little or no money for hobbies etc.... that is not living, it's existing or surviving.

Jim2007

....... wrote: »

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Of course it will not be their only expenses! As any house owner will tell you, you will have to pay to maintain the house. There will also be medical expenses that are not covered, that you will either decide you have to do without or pay yourself.

Depending on your health at the time, you may need to make changes to your house to make it easier for yourself and so on.

BrianBoru00

Jim2007 wrote: »

You are talking about, while the state easily has more revenue to provide social services that it will have in say thirty or forty years time.... I won't even address your sense of self entitlement, but suffice to say it will not matter, because the resources will simply not be there.

Err....theres absolutely no self entitlement here . .. .

Deleted User wrote: »

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

What he's stating is 100% true. If anything he's pointing out other peoples self entitlement, not his or his mothers.

looksee

I'm going to keel over at 80? I thought I had more than 8 years, reckoning on more like 18. And I am very grateful for my pension - when I was in my 20s and 30s I was invincible, could do anything. Now I'm not so sure and its very nice to have an income that does a little bit better than minimum existence.