How's your pension?

Nijmegen wrote: »

Anyone who has an employer putting money in on a match basis who doesn't maximise it is basically throwing away the most tax efficient cash they will likely ever work with - No tax on the way in and highly favourable tax treatment on the way out.

If you have a high disposable income you should really consider maximising your contributions generally, given that the money you put into your pension is gross rather than net of tax.

Agreed, have nudged a few colleages to increase their 1% (mandatory) to 4% personal contribution making their total contribution go from 3% including the employer match to 12% overall. Have been putting in 15% (+8% match) since the month I started. Don't know any different, I can imagine it stinging a bit if you started it down the line and got used to the extra dispoable cash

Augeo wrote: »

What this poster mentions.........

Can't find any mention of either of those in the documents but there is a "Contribution Fee" which is probably equivalent and looks to be at 5%.
Thanks for the help guys. Half the reason I have been putting off getting it going again is that I had a feeling it was shafting me somehow.

Pen.. sion?!

I think many of us who are putting decent money into a pension are secretly worried that somehow the Gov will find a way to steal too much of it from us in later life, to help pay for all those who couldn't be bothered with a private pension.

delboythedub wrote: »

Well done and you should go on line and check how your pension is doing regularly. Mine dropped €10.000 in one year and then i learned to keep a very close check on it. It always nice to know that you will have a few quid in your pocket when you retire and have time to enjoy it. I retired 2 years ago.

pensions will always fluctuate and it's pretty much a waste of time, money and emotion chopping and changing based on yearly results...

mariaalice wrote: »

I would not be worried about taking if from those with a pension to pay for those without, but I do wonder about it being levied or taxed in some way

Its a conundrum all right.
The govt wants more/all private sector employees to put on their big boy trousers and look after their own pensions.
But many dont and wont as they assume the government will always look after them with pensions at the same relative levels as today.
And the current and future governments needs to maintain existing state and public sector pension levels because touching the pensions is a vote killer and old people vote in their masses. Its policitcal suicide to cut pensions or not give them the expected €5 per year.
With less and less working people per pensioner this is the timebomb. There is tough medicine to come and the only question is who is going to be taking it.

Augeo wrote: »

Starting at 32 I'd use the max allowed as a guide until you are 50.
Once you get to that an assessment of what you have versus what you need might suggest not lashing loads more in as you can put way more in as you go over 50 etc.

How do you calculate the max allowed?

Fccwontletmebe wrote: »

Just have a few questions if someone can answer.
1) when can you take a limp sum out of the pension?
2) At what age can you start drawing down on the pension and properly retire with it?

I’m current saving a little over 2 grand a month and not paying into my works pension which matches 8%.

I really don’t want my money caught up in something out of my control until I’m 65.

I’m 31 and have savings of nearly of 100K and no mortgage.

I just don’t think it’s right for me even with the tax breaks. I plan on retiring at 55 at the latest. But more than likely 50 and pick a few contract roles every so often.

Not an expert (obviously :pac:) but you get a far better ROI on putting it in a pension than in a savings account. You get the tax break and (usually) a far better "interest" rate.
I spent the last few years building up a bit of savings for emergencies, etc. but now that I'm near my target it's time to leverage the benefits and start paying into a pension instead of letting it sit in a savings account doing nothing.

talking_walnut wrote: »

Can't find any mention of either of those in the documents but there is a "Contribution Fee" which is probably equivalent and looks to be at 5%.
Thanks for the help guys. Half the reason I have been putting off getting it going again is that I had a feeling it was shafting me somehow.

Consider moving your pension so, there's much better deals you can get. Talk to a broker.

Just have a few questions if someone can answer.
1) when can you take a limp sum out of the pension?
2) At what age can you start drawing down on the pension and properly retire with it?

I’m current saving a little over 2 grand a month and not paying into my works pension which matches 8%.

I really don’t want my money caught up in something out of my control until I’m 65.

I’m 31 and have savings of nearly of 100K and no mortgage.

I just don’t think it’s right for me even with the tax breaks. I plan on retiring at 55 at the latest. But more than likely 50 and pick a few contract roles every so often.

A good guide here. You can access your pension at 60, in answer to both question 1 and 2.

If you want to retire early a pension is really the most efficient way to maximise your money so you can do so - you end up saving €2 rather than €1. Your €100k saved you likely paid, what, another €70-90k in tax to get to that if it came from your wages.

The benefit of the pension is the tax breaks. So you can draw down 25% of the fund up to €200k of a pension tax free and another €300k at the lower rate of 20% income tax.

To be honest if your employer is offering 8% then you are just foregoing salary by not taking it. I'm assuming if you can afford to save €2k per month that you are earning in the higher tax band, so basically for every €1 you put into the pension yourself to get that match you're only really seeing €0.50 come out of your net paycheque. You're saving €100k every four years after tax. You could be saving €200k in that time plus your employer contribution if the %'s work, and then be drawing down that money or a big lump of it tax free at 60. That's a pretty sweet deal and if you have savings on hand it sounds like you have options to do whatever you want and/or deal with a short term emergency with cash on hand.

I'd suggest at the very least that you go talk to a planner who can show you the different scenarios available to run out. When you sit and look at the amount of tax you'll be paying over the next 29 years if you just continue as is you might have a little rethink.

I am lucky as in that my employer has always been very good in all aspects of social security (Pension, Life insurance, Health Insurance, Travel Insurance etc.). They match up to 12% of my salary, i.e. right now I pay 15% of my salary into the pension every month and they add another 12% to it. They also add the Social Insurance contributions they save by me giving up 15% of my salary to the Pension pot as well. Decent pot right now, but another 20 years to go and who knows how many crashes we will see by then.