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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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Geuze

hmmm wrote: »

Pensions are the last big tax break available to ordinary people, and you can see that the government are eager to remove that tax break. Something has to fund massive increases in public sector salaries.

Strange, I never heard about these "massive increases".

I know that all PS took two pay cuts during 2008-2012, and that new entrants took a third pay cut.

I know that the pay cuts are slowly being restored.

I know that by 2020, for lower paid staff at least, pay will have been restored to the pre-cut level.

Geuze

high_king wrote: »

Privatising the contributory state pension . . that's going to work out well for genuine Irish workers . . . not

That has not been suggested by anybody at any stage.

AE is an optional, 2nd-tier work pension, that will sit on top of the State pension.

Many other countries have similar systems.

high_king

Geuze wrote: »

That has not been suggested by anybody at any stage.

AE is an optional, 2nd-tier work pension, that will sit on top of the State pension.

Many other countries have similar systems.

lol

tastyt

PaulieC wrote: »

Pensions aren't really tax free. They are just tax deferred, as you get taxed on the other end when you start drawing it down. I must admit I am a bit dubious about the whole mandatory pension thing. Surely we already paying a mandatory pension with PRSI and USC ? There was plenty of money in the pension pot 10 years ago, about 20 billion and that's gone. Not on pensions mind you.

Yes but you are only taxed once at the end. You put the money on before its taxed and it builds tax free.

Compared to saving. The money your saving has already been taxed, you will also pay DIRT on the profits.

Jim2007

high_king wrote: »

Privatising the contributory state pension . . that's going to work out well for genuine Irish workers . . . not

First of all Irish workers are genuine, so leave your attitude out of it.

Second there is not intention of privatising the state pension scheme, it's the first pillar of the three pillar system.

And third how exactly to you think leaving people on a pay as you go system that will not be able to provide them with a pension in the future is helping anyone???

Jim2007

Geuze wrote: »

That has not been suggested by anybody at any stage.

AE is an optional, 2nd-tier work pension, that will sit on top of the State pension.

Many other countries have similar systems.

Well pretty much every European country is moving to the three pillar system. But the 2nd pillar is not optional in most countries and will become mandatory everywhere in the end because their simply is no other option, if you want to have a pension.

high_king

Jim2007 wrote: »

First of all Irish workers are genuine, so leave your attitude out of it.

Second there is not intention of privatising the state pension scheme, it's the first pillar of the three pillar system.

And third how exactly to you think leaving people on a pay as you go system that will not be able to provide them with a pension in the future is helping anyone???

Newsflash - you don't get to dictate what anyone's attitude is or what should happen their own money they worked ethically and legally for.

Jim2007

AndrewJRenko wrote: »

Thinking that you're smarter than the Social Welfare folks who do this for a living, having been doing it for years, have piles of great technology available to them to help them to do it is a very risky strategy.

What are you talking about??? The state pension schema is a pay as you go system, what comes in, gets payed out. They do not manage funds....

And yes NTMA are very good, among the best in the world in fact. But they are not part of the social services.

Jim2007

high_king wrote: »

Newsflash - you don't get to dictate what anyone's attitude is or what should happen their own money they worked ethically and legally for.

So you have no answer to the actual issue... how you can stay on a pay as you go system in the future.... enough said.

high_king

Jim2007 wrote: »

Newsflash yourself, if you don't know the undertones of "Genuine Irish Workers", that is your problem.

There are no "undertones" except those you would like to dishonestly attempt to pretend.

Dodge

high_king wrote: »

Newsflash - you don't get to dictate what anyone's attitude is or what should happen their own money they worked ethically and legally for.

What you talking about? No one is forcing ANYBODY to have a secondary pension

the plan is to give everybody the OPTION of having one (instead of relying on employers to offer one). You can opt out of it

You can decide to live on the state pension (that you think is going) or you can save for your retirement.

You’re not being squeezed at all here. You’re be giving more options

donkey balls

Dodge wrote: »

There is absolutely ZERO chance of the state pension being removed. Do any of actually live in the real world? The only group not to receive any cuts in the crash were pensioners. A government that suggests removing the prsi based OAP will be committing harikari.

Probably not removed but more stringent checks possibly with someone having a private pension that they are deemed to have enough to get by without the state pension.

namenotavailablE

Midlife crisis man wrote: »

So everybody uses pensions as a tax avoidance scheme?

Everybody using pensions as a tax avoidance scheme is more or less what the government proposals for auto-enrolment are about.

high_king

Dodge wrote: »

What you talking about? No one is forcing ANYBODY to have a secondary pension

the plan is to give everybody the OPTION of having one (instead of relying on employers to offer one). You can opt out of it

You can decide to live on the state pension (that you think is going) or you can save for your retirement.

You’re not being squeezed at all here. You’re be giving more options

We all know the aim of this measure is to ensure there won't be state pension in the future for anyone who actually has to work for a living.

Instead you'll have the "option" to "purchase" a far lessor ****ty annuity from a private sector fee gouger. But of course those who didn't bother their ass working will be handed the full state pension no questions asked other than means testing.

Same for nursing care to confiscate what little money / home you will have left at the end, while those that didn't bother their ass working, paying taxes, or saving will be provided everything for free.

That's ok . . If that's how they want to play it . . I'll just milk the system instead as well then.

mydingaling2

Currently paying 15% of my salary into a 401K pension with the employer matching 8%.
I can withdraw whenever I like but plan on retiring at 55 and going home permanently. I can take it at 55 if im still with the same company and before this i'm hit with a 10% penalty. I only started paying in at age 28. This is what my pension will look at going by years.

Age 35: 143K
Age 40: 307K
Age 45: 548K
Age 50: 899K
Age 55: 1,404,000
Age 60: 2,127,000
Age 65: 3,158,000

I am taxed on whatever i take out.

I know that I am secure with the rest of my salary once i am paying into the pension but still manage to save 1200 a month out of my main salary without the pension. Thinks could change and I might plan on retiring at 50 and heading home and have my savings and pension as a nest egg.

Dodge

high_king wrote: »

We all know the aim of this measure is to ensure there won't be state pension in the future for anyone who actually has to work for a living.

Again. You don’t know anything. The prsi based pension will never go.

No political party has the balls to touch it

As for the rest of your post... you can have WHATEVER pension product you want. 50% of people already have a private/occupational pension. The new scheme doesn’t effect them at all

high_king

Dodge wrote: »

Again. You don’t know anything. The prsi based pension will never go.

No political party has the balls to touch it

As for the rest of your post... you can have WHATEVER pension product you want. 50% of people already have a private/occupational pension. The new scheme doesn’t effect them at all

lol - if you believe that you will believe anything. Cut by cut, little by little, stealth measure by stealth measure, it's very simple to get rid of.

Recent history has proved political parties in Ireland are very easily bought by large financial institutions.

Why do they refuse to disclose the fees the "institutions" will charge us ?

Dodge

They obviously will before it’s launched and you can make your decision on it then

high_king

Dodge wrote: »

They obviously will before it’s launched and you can make your decision on it then

lol, what do you think it is . . the eircom share scam . .

donkey balls

My aul lad retired 2 years ago 44 years in the public sector and possibly 2/3 years in the private sector,While going about getting his state pension sorted out he had to bring bank statements and other docs.
This was to assess his income that's after working his balls off for nearly 50 years,
Yes the political parties would crap them selves in trying to get rid of the state pension all together,But whose not to say that they will change the rules around the state pension making it harder for people who have a private pension to draw down the state one.
Sure we only have to look at what they did in the past with medical cards and people with disabilities, I only found out recently that they changed the amount of days someone can claim of the DSW while out sick.

S.M.B.

What about his income were they assessing?

ytpe2r5bxkn0c1

S.M.B. wrote: »

What about his income were they assessing?

Public sector worker, paid reduced PRSI rate, so non-contributory pension requires means test. He should have a public service pension as well.

Dodge

donkey balls wrote: »

My aul lad retired 2 years ago 44 years in the public sector and possibly 2/3 years in the private sector,While going about getting his state pension sorted out he had to bring bank statements and other docs.
This was to assess his income that's after working his balls off for nearly 50 years,
Yes the political parties would crap them selves in trying to get rid of the state pension all together,But whose not to say that they will change the rules around the state pension making it harder for people who have a private pension to draw down the state one.
Sure we only have to look at what they did in the past with medical cards and people with disabilities, I only found out recently that they changed the amount of days someone can claim of the DSW while out sick.

If he worked 44 years in the public sector he should have had an occupational pension and he wasn’t paying PRSI so wouldn’t be entitled to a contributory pension

So if he was applying for the non-con pension, it’s means tested. If he has the means, then fair play to him

donkey balls

He actually receives the state pension but not a full one this is down to him having paid PRSI before going to the public sector.
But I am still of the opinion that there will be changes down the road for the state pension,It will still be around but the criteria for it will change.

[Deleted User]

Wanderer78 wrote: »

its all risk, i know people who retired just prior to their pension kicking in, because they done the 'right thing', by declaring all their savings, noting they worked all their lives, many decades, they will not receive payment until it falls to the threshold, i.e. doing 'the right' can sometimes lead to immoral outcomes

If they worked all their lives, and made PRSI contributions, they get the standard old age pension. It's not means tested, so it doesn't matter what savings they have or didn't have.

Jim2007 wrote: »

What are you talking about??? The state pension schema is a pay as you go system, what comes in, gets payed out. They do not manage funds....

And yes NTMA are very good, among the best in the world in fact. But they are not part of the social services.

I'm on about his suggestion to 'hide' savings from Social Welfare. It generally doesn't come out well.

Wanderer78

AndrewJRenko wrote: »

If they worked all their lives, and made PRSI contributions, they get the standard old age pension. It's not means tested, so it doesn't matter what savings they have or didn't have.

if your not of pensionable age, you wont be receiving it, and you ll also find it difficult to pick up work in your 60's

Jim2007

donkey balls wrote: »

Yes the political parties would crap them selves in trying to get rid of the state pension all together,But whose not to say that they will change the rules around the state pension making it harder for people who have a private pension to draw down the state one.

The point is that it does not matter what they do, it's a "pay-as -you" system and there will not be enough people to pay in to finance you pension. It is that simple.

When I moved to Switzerland thirty years ago, the first thing that hit me was how old everyone in the work place was, unlike Ireland at the time where I was one of the oldest people on the team at 27! At the time they were just introducing the same system as Ireland is now. And today the total state pension would cover about 3 months of living expenses, the other 9 months you need to cover from savings and even at the level workers are paying about 9% into the state pension so there is no chance they are willing to pay anymore. In some cases Swiss pensioners are being forced to move to Spain/Portugal or the south of Italy, because they cannot afford to live in Switzerland anymore.

That is the problem Ireland and all of the other EU states are trying to address by moving to this new system. You can forget about a state pension, there simply will not be the workers to cover your pension, so you either save for it or expect to have a very frugal retirement

2Mad2BeMad

mydingaling2 wrote: »

Currently paying 15% of my salary into a 401K pension with the employer matching 8%.
I can withdraw whenever I like but plan on retiring at 55 and going home permanently. I can take it at 55 if im still with the same company and before this i'm hit with a 10% penalty. I only started paying in at age 28. This is what my pension will look at going by years.

Age 35: 143K
Age 40: 307K
Age 45: 548K
Age 50: 899K
Age 55: 1,404,000
Age 60: 2,127,000
Age 65: 3,158,000

I am taxed on whatever i take out.

I know that I am secure with the rest of my salary once i am paying into the pension but still manage to save 1200 a month out of my main salary without the pension. Thinks could change and I might plan on retiring at 50 and heading home and have my savings and pension as a nest egg.

Ya I plan on retiring at 30, im 26 now and havn't saved a penny into a pension yet,
but if i manage to stick 5 percent of my annual income into it at which my employer will match by 100000% i reckon il have at least 45million by then.

Not sure if its enough though might have to stretch it to 35. I'll see.

[Deleted User]

mydingaling2 wrote: »

Currently paying 15% of my salary into a 401K pension with the employer matching 8%.

Age 35: 143K
Age 40: 307K
Age 45: 548K
Age 50: 899K
Age 55: 1,404,000
Age 60: 2,127,000
Age 65: 3,158,000

I wish you luck. Those are like the pie in the sky figures Eagle Star quoted me 20+ years ago. Compounded 12% interest and assuming large pay increases each year until retirement.

KyussB

A good rule of thumb, is that anyone promising you growth significantly greater than the percentage of GDP growth, is a con man.