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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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mydingaling2

2Mad2BeMad wrote: »

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.

I will be taxed on it.

Squozen

KyussB wrote: »

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

The US stockmarket has given significantly greater returns than their GDP growth for the last century.

Squozen

high_king wrote: »

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

So your ‘solution’ is to stick your head in the sand and hope the state pension still exists when you retire, as opposed to ensuring you will have (potentially) far more from a private pension?

May I ask how old you are?

Henry Ford III

S.M.B. wrote: »

Is auto enrollment not a necessary step to manage the massive move from Defined Benefit pensions to Defined Contribution pensions as opposed to the first step in a grand plan to means test the state pension?

Non contrib. OAP is already means tested.

[Deleted User]

Wanderer78 wrote: »

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

So you're talking about means-tested Job Seekers, not pensions at all?

KyussB wrote: »

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

Anyone promising pension growth at all is a con man. Funds can fall as well rise. In the long term, history suggests that funds give consistent growth.

S.M.B.

Henry Ford III wrote: »

Non contrib. OAP is already means tested.

Yeah, apologies I meant the
contributory state pension which it sounds like it's what a few are alluding to.

Dodge

I think what this thread highlights is the need for some sort of automatic enrolment pension scheme to be honest

The amount of people who clearly have no idea how pensions work now, never mind how they may work in the future, is ridiculous

If you want to have any sort of good living standard when you retire, you need to start saving for it. If all the launch of auto enrolment does is make people aware of that, even if makes them have a look at what products are available, then it will be a success

KyussB

Squozen wrote: »

The US stockmarket has given significantly greater returns than their GDP growth for the last century.

The stock market is incredibly volatile, and the rate of return depends upon how selectively you pick your start and end dates - someone who isn't looking to be conned, should expect only a small number of percentage points return, above GDP growth - at best.

Nermal

Squozen wrote: »

The US stockmarket has given significantly greater returns than their GDP growth for the last century.

A century in which it escaped two world wars, became the dominant economic power on Earth, spearheaded globalisation, financialisation and was the home of multiple revolutions in information technology. I'm not saying that the next century won't be as good, but don't pretend the last one wasn't exceptional.

high_king

Dodge wrote: »

I think what this thread highlights is the need for some sort of automatic enrolment pension scheme to be honest

The amount of people who clearly have no idea how pensions work now, never mind how they may work in the future, is ridiculous

If you want to have any sort of good living standard when you retire, you need to start saving for it. If all the launch of auto enrolment does is make people aware of that, even if makes them have a look at what products are available, then it will be a success

It's this type of half witted patronising shyte that FG are famous for.

BailMeOut

high_king wrote: »

It's this type of half witted patronising shyte that FG are famous for.

Can you please explain what you mean by this?

[Deleted User]

BailMeOut wrote: »

Can you please explain what you mean by this?

Seem to have forgotten FFs carry on...

Anyway, Pension auto enrollment etc is a product of the 'Permanent Government'. Nothing to do with political parties. It was supposed to be introduced already, but got kicked down the road a few years.

Like most policies we copy our neighbors. Have a look at how it is doing in the UK. They are happy with the results and actually surprised at the number of low paid employees who did not opt out.

BTW it is the pension companies who are the most worried, there are many people who currently earn a nice tidy recurring commission...

hmmm

high_king wrote: »

It's this type of half witted patronising shyte that FG are famous for.

The government are not saving now in order to pay for any pensions in the future, so the only way you will get your future pension is off the back of the workers of the future.

And at some point the workers of the future are going to wonder why they are paying a lot of tax to provide pensions for people who didn't bother to do any saving for their retirement.

KyussB

Load of bollocks - taxes don't 1:1 fund government spending (including on pensions), and they never have - government finances are nothing like personal finances, they function completely differently.

Government properly funding publicly provided pensions is nothing more than a political decision - if it's a priority to the government, it can be done perfectly sustainably.

The reason the government can't be relied on this way, is due to the NeoLiberal ideological leanings of the main parties - enacting stupid shit like this massive auto-enrollment subsidy of the finance industry...

Squozen

KyussB wrote: »

The reason the government can't be relied on this way, is due to the NeoLiberal ideological leanings of the main parties - enacting stupid shit like this massive auto-enrollment subsidy of the finance industry...

And again I’ll point out that Australians retire at the age of 55 due to this ‘stupid ****’.

Jim2007

KyussB wrote: »

Government properly funding publicly provided pensions is nothing more than a political decision - if it's a priority to the government, it can be done perfectly sustainably.

The reason the government can't be relied on this way, is due to the NeoLiberal ideological leanings of the main parties - enacting stupid shit like this massive auto-enrollment subsidy of the finance industry...

You don't have to be a genius to figure out that the population is getting order and that in 50 years time there simply will not be enough people around to pay for your pension and those that are in the workforce will not want to hand over say double or more the current social security rate just so you can have a pension and good social services to look after you in old age.

You are right politicians do what get's them elected, that is why it has taken so long right a cross Europe for them to bring home this bad news. And by the same token don't expect voters in 50 years time will be voting for politicians that will increase their taxes to cover your pensions and other social needs, they will not.

Jim2007

KyussB wrote: »

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

A better rule of thumb is that when you don't know what you are talking about, you research the topic using actual facts rather than listen to the political blah, blah...

The majority of pension funds across Europe regularly deliver returns of between 4% and 8% and do so at reasonably risk levels. I know this because I spent 30 years doing performance and attribution analysis on about a 1000 of them.

GreeBo

Mantis Toboggan wrote: »

20% of people die in Ireland before they reach 65 so I'd slightly agree with the OP, chances are you'll never see that money. Life is short, enjoy it, we'll all be dead in 80 years anyway and a few years dead and you're long forgotten.

sorry, I was just re-reading the thread and came across this nugget!

20% = chances are?!?!
so even though 80% of people reach the pensionable age, you think chances are the OP wont?!

GreeBo

KyussB wrote: »

The stock market is incredibly volatile, and the rate of return depends upon how selectively you pick your start and end dates - someone who isn't looking to be conned, should expect only a small number of percentage points return, above GDP growth - at best.

Over the 40+ years life of your pensions the stock market is only going one way.

the problem is people who suddenly think about a pension in their 50s. thats exposing you to being on the wrong side of a stock market dip when you are 65 and thats why you move your pension into less volatile areas as you get closer to cashing it in.

KyussB

Squozen wrote: »

And again I’ll point out that Australians retire at the age of 55 due to this ‘stupid ****’.

That is false - the retirement age in Australia was falling until the introduction of auto-enrollment in 1992 - and thereafter the retirement age has been increasing:
Retirement01

KyussB

Jim2007 wrote: »

You don't have to be a genius to figure out that the population is getting order and that in 50 years time there simply will not be enough people around to pay for your pension and those that are in the workforce will not want to hand over say double or more the current social security rate just so you can have a pension and good social services to look after you in old age.

You are right politicians do what get's them elected, that is why it has taken so long right a cross Europe for them to bring home this bad news. And by the same token don't expect voters in 50 years time will be voting for politicians that will increase their taxes to cover your pensions and other social needs, they will not.

Public pensions are meant to be paid by the public purse - they don't suffer any of the effects of demographics, unless they are deliberately designed to for political reasons.

You don't understand how government finances work - public funding doesn't come 1:1 from taxes, and your speaking as if it does - it almost never does.

KyussB

Jim2007 wrote: »

A better rule of thumb is that when you don't know what you are talking about, you research the topic using actual facts rather than listen to the political blah, blah...

The majority of pension funds across Europe regularly deliver returns of between 4% and 8% and do so at reasonably risk levels. I know this because I spent 30 years doing performance and attribution analysis on about a 1000 of them.

You measure the stability of pensions over the course of 40-50 years - and what you're investing in matters, as pensions historically and presently are lacking in a combination of transparency and consumer control, that allows avoiding investments in industries that externalize a huge amount of their costs and engage in other unethical practices, like the fossil fuel industry, tobacco industry, pharma industry among many others.

If people want to invest ethically, they are not going to get rates of return that exploitative/unethical investments offer - and there is ltitle more than token options for ethical pension investing, which do not have enough combined transparency and control for the person investing.

dotsman

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.

I think you really need to reexamine your figures before you get your hopes up!

Without knowing the details, I can only assume that the above figures assume that you stay invested in high-risk, volatile stocks. While that is definitely the investment approach you want in your 20's and 30's (even 40's), once you begin to approach 10-15 years of your planned retirement age, you need to seriously deleverage. Your last 7-odd years before you retire should be pulling you in a consistent 1-3% returns.

Robert_Beach

I agree with KyussB. I dare any of ye here to actually have a look and see what scumbag companies your pensions are in.

Most people haven't a clue as they've been railroaded into them. Imagine, people are forced to prop up the financial markets to enrich the "Masters of the Universe" who nearly destroyed the global economy a decade ago, and in so doing are actually helping to destroy the climate!

We need to move away from this system, which needs war, climate destruction, people destruction (smoking, drink, gambling etc) to one that actually helps people in old age.

coylemj

KyussB wrote: »

Public pensions are meant to be paid by the public purse - they don't suffer any of the effects of demographics, unless they are deliberately designed to for political reasons.

Paying pensions from current revenue (taxes) means that the pension scheme is completely vulnerable to demographics. The ratio of workers to retired people (known as the 'dependency ratio') is set to plummet from 5:1 today to 2:1 by 2050, thanks to a reduced birth rate and increased life expectancy.

If public pensions are not subject to demographics, you'd wonder why we're continuously hearing about something called the 'demographic time bomb'

KyussB wrote: »

You don't understand how government finances work - public funding doesn't come 1:1 from taxes, and your speaking as if it does - it almost never does.

Where do you think the money comes from?

The state old age pension and pensions payable to retired public service workers are all paid from the current year's budget. That means taxes, there is no pension fund.

KyussB

There you are parroting the idea that government spending comes 1:1 from taxes again...

The demographics timebomb is certainly going to be a thing for privately managed pension funds, yes - that's why we need to bolster the safety net of the public pension, which has no such problem.

Budgets aren't funded 1:1 from taxes - almost never. Balanced budgets almost never happen.

coylemj

KyussB wrote: »

There you are parroting the idea that government spending comes 1:1 from taxes again...

The demographics timebomb is certainly going to be a thing for privately managed pension funds, yes - that's why we need to bolster the safety net of the public pension, which has no such problem.

Budgets aren't funded 1:1 from taxes - almost never. Balanced budgets almost never happen.

Where does the money come from to pay the state old age pension and the pensions of retired public sector workers like nurses, Gardai, Army, teachers, civil servants etc?

Dodge

For a start our contributory pension isn’t funded by taxation but rather the social insurance fund

And while you can argue that’s a form of taxation (it isn’t), the fact remains that state pension spending here has increased year on year. It’s percentage of the governments total budget has increased year on year

And it will continue to do so as we have more and more people reaching pension age, and living longer

So while there will always be a state pension IMO, it will be other areas of the governments spending that will suffer

And none of this has anything to do with the very good idea that people should save for their retirement

KyussB

The state old age pension isn't the model of public pension in question - the discussion is about the governments ability to fund public pensions in general, which is not limited to the current model of the state old age pension.

The government has the full ability to fund pensions from government spending - and this is not taken 1:1 fom taxation, because that's not how government spending and wider government finances work.

Public pensions are only funded 1:1 through taxation when they are deliberately modelled to do so - for political/ideological reasons, primarily - the abiltiy for government to fund public pensions is determined by government spending, and that is not restricted 1:1 with taxation - there is no 'demographics crisis' for public pensions funded this way.

Liam D Ferguson

KyussB wrote: »

There you are parroting the idea that government spending comes 1:1 from taxes again...

The demographics timebomb is certainly going to be a thing for privately managed pension funds, yes - that's why we need to bolster the safety net of the public pension, which has no such problem.

Budgets aren't funded 1:1 from taxes - almost never. Balanced budgets almost never happen.

The ratio of retired people to working people is shifting constantly towards the side of the retired people due largely to improvements in longevity. Please explain how this is only going to be a thing for privately managed pension funds and not for the State Pension.