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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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[Deleted User]

high_king wrote: »

That's a different generation, they had actual balls . . besides ageism is in now, the youth are being told to blame the old for all their woes.

It was ten years ago, not 30-50 years ago. Most of them are still drawing their pension now.

Jim2007

Squall Leonhart wrote: »

It's not fact though. It's speculation.
A man in his 50s, who you replied to, has his house in order, pension in place, feels he might be able to retire almost a decade before state pension kicks in and you are goading him with your nonsense.

Except nothing you have said in any way provides a factual rebuttal. A person in their early 50s has about 35 years to go, which means that they will be caught up in the enviable switch to the three pillar system and in every country across Europe where this has happened, the switch over generation have been hit financially. This is most likely to happen when the 50 is to old to try to earn additional income, so it is not at all unreasonable to suggest to someone to run the numbers and make sure they are covered to before they exit the work force.

You suggesting that to just ignore this and do it and hope for the best is nonsense - You need to start facing up to reality.

Squall Leonhart wrote: »

And obviously the reason the government are spearheading this campaign is to reduce their costs and pass some of the responsibility to the individual, but it not likely to disappear completely.

Have you even tried to understand the problem???? The government as you call it is the taxpayer and the pension system is 'pay as you go', so it's the taxpayer that has to foot the bill, only by the time it's your turn to get your pension there will not be enough workers to tax and the few that are working will not be willing or able to carry the huge burden.

Now when you can show statistically that the population is growing at a rate that will be able to sustain future pension you'll have a point, but until then all you are doing is refusing to deal with reality.

Squall Leonhart

I'm not sure what you're getting on to me for. I'm well aware that the ratio is shrinking, and that pensions come from current expenditure. I advocate every one paying into their own private pension from as early an age as possible, putting as much in as possible.

high_king

garbanzo wrote: »

Nope, I haven’t initially planned with that in mind. The contrib state pension, in whatever form it will be then, won’t kick in until I (hopefully) get to 68. A mixture of living off savings and staged drawdown of pensions is the plan. Perhaps a small bit of part time work if necessary but the plan is to get off the treadmill around the 60 mark.

I couldn’t get anywhere near that goal if I hadn’t started paying into a pension when I did. One of the few good decisions 28 year old me made at the time.😁😁😁

You'll be grand as long as you're not counting on the contrib pension kicking in from 68 on . . there either wont be one, or there will be so many qualifying conditions reductions and restrictions you won't get much from it.

high_king

AndrewJRenko wrote: »

It was ten years ago, not 30-50 years ago. Most of them are still drawing their pension now.

Yes they got theirs, but that has nothing to do with others getting theirs when they do get to 68, this scheme is the first sign the contrb scheme it's on the way out, or at the least phased down to a pittance.

[Deleted User]

if i was of a mind to really respond to our resident malthusians here id probably choose to do so only to those of that sect that were able to differentiate between their own predictions and what they were happy to baldly state as "fact"

high_king

Deleted User wrote: »

if i was of a mind to really respond to our resident malthusians here id probably choose to do so only to those of that sect that were able to differentiate between their own predictions and what they were happy to baldly state as "fact"

Well sooner or later you're going to have to face the glaring fact the contrib state pension it totally unsustainable.

Dodge

high_king wrote: »

Well sooner or later you're going to have to face the glaring fact the contrib state pension it totally unsustainable.

You’re the person arguing it’s unsustainable AND you’re the person complaining that the government is seeking to
address this

You’re effectively moaning about both sides of the argument

And it appears whatever happens, you’ll continue to moan. So enjoy your retirement...

high_king

Dodge wrote: »

You’re the person arguing it’s unsustainable AND you’re the person complaining that the government is seeking to
address this

You’re effectively moaning about both sides of the argument

And it appears whatever happens, you’ll continue to moan. So enjoy your retirement...

You might call pointing out facts moaning, but it won't change them. Do you really think the government is going to fund two contrib state pensions for you . .lol . . . anyway whatever you stash away we'll be able get it back off you in the "fair deal" scheme.

Saudades

I'm not too concerned about the government abolishing the state pension; due to the EU legislation which protects the pension rights of people who move between EU countries, I doubt that the EU powers that be would allow Ireland or any EU state to terminate their state's pension.

The auto-enrollment is a good idea in principle but I'd imagine a lot of high-earners already have a company pension, low-earners likely can't afford another deduction in their monthly pay cheques and will probably opt-out, and will the younger generation be disciplined enough not to opt-out, so how many will really benefit from it remains to be seen, but appears to be positive step.

Whilst home-owners have the luxury of contributing their spare change into a pension, be it private or company or auto-enrollment, is there any argument or justification for renters to be contributing to a pension if they're scrimping away every spare Euro for a mortgage deposit?

A Euro contributed to a pension is a Euro lost for that mortgage deposit.
It's painful to be losing out on employer contributions, and income tax relief, and compound interest, but so is the desperation to escape from the cost of renting in Ireland in this day and age.

There was talk (here or in the UK) of allowing first-time home buyers to use their private pension early to supplement a mortgage deposit.
Although that would have increased house prices due to the sudden surge in demand, at least those new home buyers could then pay a mortgage, make a pension contribution (starting from scratch again), and not have to worry about long-term saving for a deposit (which is cash losing inflation each year) and the unbearable prospect of being a renter closing in on retirement age.

pwurple

Saudades wrote: »

Whilst home-owners have the luxury of contributing their spare change into a pension, be it private or company or auto-enrollment, is there any argument or justification for renters to be contributing to a pension if they're scrimping away every spare Euro for a mortgage deposit?

A Euro contributed to a pension is a Euro lost for that mortgage deposit.
It's painful to be losing out on employer contributions, and income tax relief, and compound interest, but so is the desperation to escape from the cost of renting in Ireland in this day and age.

I don't know if home ownership is everything people in Ireland think it is cracked up to be. The tax regime on home ownership is as likely to change as anything else. Renting may be the more tax efficient option long term.

Take certain states in the US for example. A house in new jersey can be liable for 1200 to 2000 dollars a month property tax. Even with a mortgage paid off, that's a lot to have to sustain in your old age. Some retirees sell their home and rent to avoid maintenance and overheads. Who wants to be clearing gutters in their 80's? There is a lot to be said for rental at that age. We need to build that sector up to a good level in my opinion.

I understand what you're saying about flexibility and opting in and out. I had to cut pension contributions to zero before I went on maternity leave, as my employer at the time did not 'top up' the govt benefit, and I needed to eat and feed my kids while on that leave.

However, I don't agree in general that a mortgage deposit is something to cut your pension for.

S.M.B.

I'm not sure when I would have started contributing to my pension if it wasn't for auto enrollment introduced in the UK. Wasn't engaged in it when I first started working over here so didn't enroll when my workplace offered a very good deal. Then got auto enrolled when that kicked in but it was the first phase where it was only 1% each. My attitude has completely changed in recent years and I've been aggressively contributing which has taken precedence over saving for a deposit. People are just as bad here as in Ireland where home ownership is like some essential life goal as opposed to one possible route to financial independence.

kippy

pwurple wrote: »

I don't know if home ownership is everything people in Ireland think it is cracked up to be. The tax regime on home ownership is as likely to change as anything else. Renting may be the more tax efficient option long term.

Take certain states in the US for example. A house in new jersey can be liable for 1200 to 2000 dollars a month property tax. Even with a mortgage paid off, that's a lot to have to sustain in your old age. Some retirees sell their home and rent to avoid maintenance and overheads. Who wants to be clearing gutters in their 80's? There is a lot to be said for rental at that age. We need to build that sector up to a good level in my opinion.

I understand what you're saying about flexibility and opting in and out. I had to cut pension contributions to zero before I went on maternity leave, as my employer at the time did not 'top up' the govt benefit, and I needed to eat and feed my kids while on that leave.

However, I don't agree in general that a mortgage deposit is something to cut your pension for.

You've never rented in Ireland if you think that renting in your 80's is in any way feasible.

[Deleted User]

pwurple wrote: »

......Renting may be the more tax efficient option long term.
.........

That may well be but currently there's nothing tax efficient about renting nor is it an affordable proposition for most people.

Jim2007

Augeo wrote: »

That may well be but currently there's nothing tax efficient about renting nor is it an affordable proposition for most people.

But there is clear evidence from the US, to Finland to Ireland that property is an excellent way of serious damaging your financial future.

Heres Johnny

Jim2007 wrote: »

But there is clear evidence from the US, to Finland to Ireland that property is an excellent way of serious damaging your financial future.

Property investing, like any investing, can be damaging but buying your own home is prudent. I'm 38, mortgage since 2010, I have 20 years left if I just continue paying it normally.

Mortgage is in around 950 a month, a house to rent in my estate is anything from 2000 to 2200 a month for a 3 bed. Some difference.

As for the pension, paying in since the same year, 2010 and there's a tidy few quid there now and along with full home ownership by mid to late 50s and a few other things in the pipeline I don't plan to be working much after 60.

Its not all guaranteed of course but I'm giving myself a chance.

Viscount Aggro

Anyone thinking of retiring overseas on a pension?

Revenue have decided an ARF is not a pension, so income is taxed here, at source. Same rule applies to public sector pensions.

pwurple

kippy wrote: »

You've never rented in Ireland if you think that renting in your 80's is in any way feasible.

You know what they say about assumptions? There are a myriad of different rental agreements out there.

I will give you an example from Ireland. Not common I know, and the govt doing its level best to stamp it out, but it exists.

My neighbours live in a row of 7 terraced houses rented from a church managed fund. Basically it keeps the property maintained with a small income for the church, rather than being a pension fund or reit.

These neighbours are couples in their 70’s and 80’s and have entered into into a type of perpetuity rental agreement, which means it expires at no fixed date, it finishes when they die. Their next of kin do not inherit the rental agreement. They pay approximately 400-500 euro a month for 2 bed terraced houses, in a decent location with a bus stop outside the door.

Now , assuming these couples are only on the state pension (250 per week), with a medical card, fuel allowance and free travel, that is still fairly livable.

My parents on the other hand have retired, have a private pension, still paying a mortgage more than that rent for another three years, and the house needs a new roof, new windows after that. They are more financially stressed than my renter neighbours.

We are not all cookie cutter versions of retirement. Buying a house is fine, but should not be a blanket assumption for all.

kippy

pwurple wrote: »

You know what they say about assumptions? There are a myriad of different rental agreements out there.

I will give you an example from Ireland. Not common I know, and the govt doing its level best to stamp it out, but it exists.

My neighbours live in a row of 7 terraced houses rented from a church managed fund. Basically it keeps the property maintained with a small income for the church, rather than being a pension fund or reit.

These neighbours are couples in their 70’s and 80’s and have entered into into a type of perpetuity rental agreement, which means it expires at no fixed date, it finishes when they die. Their next of kin do not inherit the rental agreement. They pay approximately 400-500 euro a month for 2 bed terraced houses, in a decent location with a bus stop outside the door.

Now , assuming these couples are only on the state pension (250 per week), with a medical card, fuel allowance and free travel, that is still fairly livable.

My parents on the other hand have retired, have a private pension, still paying a mortgage more than that rent for another three years, and the house needs a new roof, new windows after that. They are more financially stressed than my renter neighbours.

We are not all cookie cutter versions of retirement. Buying a house is fine, but should not be a blanket assumption for all.

Community based retirement estates purpose built for the elderly are the best answer to rental schemes for this age group and thankfully they are starting to be built.

Your parents have an asset they can sell any time if they wish to rent.
The other couple have little control should something happen with the landlord or one of their incomes disappear.

celtic_oz

Listen to few of these "no pension" stories

https://www.youtube.com/user/DaveRamseyShow/search?query=%22no+pension%22

[Deleted User]

Jim2007 wrote: »

But there is clear evidence from the US, to Finland to Ireland that property is an excellent way of serious damaging your financial future.

I bought a property in 2005, the crash in 2008 suggests that 2005 wasn't a great time to buy. But I've a huge chunk of it paid off & it suits me to live there. It's worked out grand accepting I could possibly have bought it cheaper in 08, 09, 10 etc.

Lots of things can seriously damage your financial future..... Owning a home isn't the worst.

Paying huge amounts in rent isn't overly beneficial I imagine.

kravmaga

Midlife crisis man wrote: »

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.

https://www.independent.ie/irish-news/pensions-for-dummies--30806955.html

Saudades

pwurple wrote: »

I don't know if home ownership is everything people in Ireland think it is cracked up to be. The tax regime on home ownership is as likely to change as anything else. Renting may be the more tax efficient option long term.

The tax regime may or may not change in the future but you can only go on what it currently is today - and the current 0.18% property tax is so low at the moment it's not exactly a deal breaker even for the elderly.
A 400k house is less than 2 euro a day in LPT.

pwurple wrote: »

Take certain states in the US for example. A house in new jersey can be liable for 1200 to 2000 dollars a month property tax. Even with a mortgage paid off, that's a lot to have to sustain in your old age. Some retirees sell their home and rent to avoid maintenance and overheads. Who wants to be clearing gutters in their 80's? There is a lot to be said for rental at that age. We need to build that sector up to a good level in my opinion.

Well that's the US; I'm only concerned about Ireland! Though I do think in the US they have more variety of living options anyway - retirement villages, communes, trailer parks, caravans.

But anyway those retirees in your example have an asset worth 6 figures. If they choose to sell their home and rent instead (which in Ireland I think would be madness!), they have a 6 figure sum to supplement their state and private pension to cover rent.

It just won't be possible for a retiree to rent in the private sector judging by the housing situation in Ireland right now, unless they sold a house, or they have a massive private pension - which is unlikely as if someone's working life salary was too low to purchase a home, then it's unlikely they were contributing significantly to a pension during their working life.

pwurple wrote: »

I understand what you're saying about flexibility and opting in and out. I had to cut pension contributions to zero before I went on maternity leave, as my employer at the time did not 'top up' the govt benefit, and I needed to eat and feed my kids while on that leave.

I think I misunderstood this - do you mean your employer didn't give you tax relief from your contribution?

pwurple wrote: »

However, I don't agree in general that a mortgage deposit is something to cut your pension for.

Perhaps then I've made a financial faux pas! My employer offers a 6%EE/8%ER contribution plan - but I've opted down to the minimum allowed (3%EE/3%ER) to save more money now for a mortgage deposit.

If you think that's insane, one of my colleagues has also opted down to the minimum because he's investing all his disposable income into bitcoin (which may be a clever investment but sacrificing 20% tax relief, employer contribution, and compound interest). At least he's a home owner though!

Grassey

Saudades wrote:

I think I misunderstood this - do you mean your employer didn't give you tax relief from your contribution?

I'd guess they mean cover the difference between minimum maternity pay and her full salary while on maternity leave.

Nermal

Viscount Aggro wrote: »

Anyone thinking of retiring overseas on a pension?

Revenue have decided an ARF is not a pension, so income is taxed here, at source. Same rule applies to public sector pensions.

Transfer it to your retirement country...

Itssoeasy

I've not read the other comments but just answering the thread title. Is it peace of mind in people's older years ?

Das Reich

I know a man from my country that have just 5 years working here now in a meat factory. Got an Irish passport despite having no Irish ancestry and no English, got an accident by cutting his finger a bit but didn't lose it and will get about 50.000 euros, and now is only working to arrive at 260 weeks of contributions, so he can apply for a retirement as he says to have a healthy problem and will get 250 euros week. He is early 50's and in good shape for work. I think pension is a scam, if you are lucky you will retire early, otherwise will die at age 65 after 40 years of contributions like some cases I read.

Limpy

Pension and or stock options in your company (if applicable) That's two tax free options you can do to maximize your take home pay. Its also more in your pocket down the road instead of the tax man's.

[Deleted User]

Das Reich wrote: »

I know a man from my country that have just 5 years working here now in a meat factory. Got an Irish passport despite having no Irish ancestry and no English, got an accident by cutting his finger a bit but didn't lose it and will get about 50.000 euros, and now is only working to arrive at 260 weeks of contributions, so he can apply for a retirement as he says to have a healthy problem and will get 250 euros week. He is early 50's and in good shape for work. I think pension is a scam, if you are lucky you will retire early, otherwise will die at age 65 after 40 years of contributions like some cases I read.

260 weeks of prsi won't get the 260/week contributory pension..... It sounds like he's going to apply for disability rather then the state pension.

Heres Johnny

Das Reich wrote: »

I know a man from my country that have just 5 years working here now in a meat factory. Got an Irish passport despite having no Irish ancestry and no English, got an accident by cutting his finger a bit but didn't lose it and will get about 50.000 euros, and now is only working to arrive at 260 weeks of contributions, so he can apply for a retirement as he says to have a healthy problem and will get 250 euros week. He is early 50's and in good shape for work. I think pension is a scam, if you are lucky you will retire early, otherwise will die at age 65 after 40 years of contributions like some cases I read.

2 grandfather's went to 81 and 84, grandmother's 94 and 99. Both parents now 66 and healthy as I am. All aunts and uncles still alive and healthy, most in 70s now. Only 1 of my close circle of friends has lost a father and 1 a mother. Rest still alive and healthy.

Will you go away with your dying at 65 crap you'll be very poor in retirement. If you really feel you'll die at 65 pump it all into a life insurance policy so.