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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]

Augeo wrote: »

A married couple needs 88k to live off and a single person 48k ?

The cost of living is Switzerland is very large. But their wages are extremely high also so stands to reason a pension would also need to be far higher than here.

As an example that’s easy to compare like for like a PhD student stipend in Ireland is about 18k a year, in Switzerland a PhD student would be on 40 to 50k.

GreeBo

Klonker wrote: »

I'm not expecting anything, I'm just asking a question as I'm curious about it.

The poster mentioned that in Switzerland the state pension is about quarter what it is here as you are expected to have an employers pension and savings. I was just wondering if people did not have either of those are they expected to live on the small state pension or if there might be an extra means tested payment.

Like if it was here in Ireland, could you expect people to be on about 200 a week dole and then when pension age to be in 50 a week? I'm just wondering who it all works because I know the irish version will need to change in some way as unsustainable.

No worries, I wasn't trying to be a dick, literally just asking what you think the other options are?

Dodge

Bass Reeves wrote: »

The state pension is made up of two types, the contributory and non-contributory. The NC is means tested. If you qualify for the Contributory pension you can have any amount of other income with it. There are differencet rates depending on amount of contribution you have made over your lifetime. While not exact (as now it Avery contribution/ working year) 10 years will get you about 100/week, 15 years about 160, 20 years about 200 and 40 years full pension 240/ year.

If you have a partial contributory pension you are entitled to top up with NC provided you pass the means test. The differencate between NC and C type pensions is minimal. The main difference is the N.C part is means tested.

However the issue for the state is if workers that make contributions who even if they have a private pension are means tested it will discourage these people to save for there retirement.

This is incorrect. The contributory and non-contributory are seperate pensions with their own criteria. There is no top up. SPC is based solely on contributions (paid/credited). SPNC is based solely on means

Your rates are a bit off too. YA is a bit too complex to describe here but under the current total contributions approach, 40 years is needed for the max rate (248.30) and everything below that is pro-rated. So 10 years = 25% etc

For the yearly average rates and the spnc rates see pages 21-25 here https://assets.gov.ie/11117/6beb1ad2f51346f4ad6f27db1c473e59.pdf

[Deleted User]

Deandre Wooden Selflessness wrote: »

The cost of living is Switzerland is very large. But their wages are extremely high also so stands to reason a pension would also need to be far higher than here.

As an example that’s easy to compare like for like a PhD student stipend in Ireland is about 18k a year, in Switzerland a PhD student would be on 40 to 50k.

It must be very high if 88k is needed for a retired couple to live.......

[Deleted User]

Augeo wrote: »

It must be very high if 88k is needed for a retired couple to live.......

I have a friend over there on about 90k net and he still rents a room in a fairly well worn houseshare with 4 others (mix of postgrad students and professionals). Drives to france do food shopping too.

Now he is frugal and could rent alone or in a nicer place quite easily but it's so expensive he can't bring himself to do it. I reckon he is saving more than half his salary due to housesharing etc but thats still aruond 40k he spends and thats net (I'm quoting net as he doesn't pay tax so wouldn't know how to gross up his salary).

Jim2007

Augeo wrote: »

It must be very high if 88k is needed for a retired couple to live.......

Well for a start we have no public health system, the entire Federal department of health employs less than 500 people. You end having to carry the whole cost of health insurance so that can easily come to 20k+ p.a.

There is no free public transport etc... and very few other concessions retirees and all disbursements from pension funds are fully taxed.

Some Swiss retirees you see in Spain, Portugal and the south of Italy are there no because they want to be, but because they can't afford to be in Switzerland all the time.

Bass Reeves

Dodge wrote: »

This is incorrect. The contributory and non-contributory are seperate pensions with their own criteria. There is no top up. SPC is based solely on contributions (paid/credited). SPNC is based solely on means

Your rates are a bit off too. YA is a bit too complex to describe here but under the current total contributions approach, 40 years is needed for the max rate (248.30) and everything below that is pro-rated. So 10 years = 25% etc

For the yearly average rates and the spnc rates see pages 21-25 here https://assets.gov.ie/11117/6beb1ad2f51346f4ad6f27db1c473e59.pdf

You misunderstand what I posted. If a person only qualified for a partial contributory pension, the 100 or 160 rate and if they have no other means of savings they will be topped up to the non contributory rate

Dodge

Bass Reeves wrote: »

You misunderstand what I posted. If a person only qualified for a partial contributory pension, the 100 or 160 rate and if they have no other means of savings they will be topped up to the non contributory rate

They won't be topped up.

They've to apply separately. They can choose to receive whichever pension is most beneficial for themselves, but they are not linked and there is no "top up"

The non con pension is also subject to (means) review

Famous Blue Raincoat

Not sure if anybody read that report two days ago on global population decline, but if it transpires, it will be very worrying in the sense that with so many older people and so few younger taxpayers left to support them all, something will have to give.

Fertility rate: 'Jaw-dropping' global crash in children being born

Blacktie.

By the end of the century... I think we'll be alright.

Padre_Pio

Blacktie. wrote: »

By the end of the century... I think we'll be alright.

Speak for yourself.

Anyone who's 30 will likely live another 70 years.

Yellow_Fern

Famous Blue Raincoat wrote: »

Not sure if anybody read that report two days ago on global population decline, but if it transpires, it will be very worrying in the sense that with so many older people and so few younger taxpayers left to support them all, something will have to give.

Fertility rate: 'Jaw-dropping' global crash in children being born

A further problem is that as the population crunch happens, labour will become more valuable and capital will become less. So pension investments may grow less.

[Deleted User]

Jim2007 wrote: »

Well for a start we have no public health system, the entire Federal department of health employs less than 500 people. You end having to carry the whole cost of health insurance so that can easily come to 20k+ p.a.

There is no free public transport etc... and very few other concessions retirees and all disbursements from pension funds are fully taxed.

Some Swiss retirees you see in Spain, Portugal and the south of Italy are there no because they want to be, but because they can't afford to be in Switzerland all the time.

Sounds not at all like Ireland so drawing parallels between what will happen here and what has happened there are interesting but not likely to happen.

Like, no public health system and folk expected to carry the whole cost of health insurance ..... could you imagine that in Ireland where we have a growing entitlement culture.

Our public transport here is effectively subsidised by the state via "free" travel for pensioners and other folk who qualify.

The Swiss example sounds like a way not to do it really. You won't have Mr & Mrs Murphy from Finglas going to Spain for half the year as they can't afford to stay here on the NC pension in their corporation / HAP paid / affordable house

Jim2007

Augeo wrote: »

Sounds not at all like Ireland so drawing parallels between what will happen here and what has happened there are interesting but not likely to happen.

Really, the reproduction rate in Ireland will suddenly increase so much that there will sufficient people in the work force to continue contribution at the required rate?

Augeo wrote: »

The Swiss example sounds like a way not to do it really. You won't have Mr & Mrs Murphy from Finglas going to Spain for half the year as they can't afford to stay here on the NC pension in their corporation / HAP paid / affordable house

We are not talking about what happens today or tomorrow or in five years time... we are talking about 30 to 50 years time... The only difference between Switzerland, Ireland or any other EU for that matter is timing, that is all. And by the time it is the turn of Mr & Mrs Murphy will probably not have the option of going to Spain because they will have the exact same issue - nobody to pay for the services.

Every single country faces the same problem - there will not be enough payers to continue supporting the pay-as-you go method of financing all the things you listed.

So the only choice you have is when you address the issue and the longer it is put off the more painful it will be.

Yellow_Fern

Augeo wrote: »

Sounds not at all like Ireland so drawing parallels between what will happen here and what has happened there are interesting but not likely to happen.

Like, no public health system and folk expected to carry the whole cost of health insurance ..... could you imagine that in Ireland where we have a growing entitlement culture.

Our public transport here is effectively subsidised by the state via "free" travel for pensioners and other folk who qualify.

The Swiss example sounds like a way not to do it really. You won't have Mr & Mrs Murphy from Finglas going to Spain for half the year as they can't afford to stay here on the NC pension in their corporation / HAP paid / affordable house

We will very soon go from being one of the youngest populations in Europe to one of the fastest ageing populations. We'll hit the EU average in about 15 years' time. By 2050, our population will be older than any other EU state is today.

https://www.rte.ie/news/business/2020/0714/1153284-age-population/

sportsfan90

As someone who was about to start a pension this year, I’m now undecided as to when’s the best time to do so. I know it’s always said the best time to start a pension is today, but Covid has really thrown me and maybe my money is better off going into my bank account for the time being.

With the economic damage, especially if further Covid waves and lockdowns happen, maybe I’d be better off waiting another 6 months to see if there’s a bit of stability. Then again now could be the perfect time to start when many investment prices are down. Who bloody knows.

GreeBo

sportsfan90 wrote: »

As someone who was about to start a pension this year, I’m now undecided as to when’s the best time to do so. I know it’s always said the best time to start a pension is today, but Covid has really thrown me and maybe my money is better off going into my bank account for the time being.

With the economic damage, especially if further Covid waves and lockdowns happen, maybe I’d be better off waiting another 6 months to see if there’s a bit of stability. Then again now could be the perfect time to start when many investment prices are down. Who bloody knows.

Start now, unless you are in your 50s it will all work itself it out.
Even if there is another dip, all that means is that your investment gets more units. When the recovery happens you are automatically benefitting.

TimeToShine

sportsfan90 wrote: »

As someone who was about to start a pension this year, I’m now undecided as to when’s the best time to do so. I know it’s always said the best time to start a pension is today, but Covid has really thrown me and maybe my money is better off going into my bank account for the time being.

With the economic damage, especially if further Covid waves and lockdowns happen, maybe I’d be better off waiting another 6 months to see if there’s a bit of stability. Then again now could be the perfect time to start when many investment prices are down. Who bloody knows.

I'm deliberating something similar but my thinking is the opposite funnily enough. I'm seeing the EU and US Fed basically printing trillions to use in the recovery effort and feel like it will heavily devalue cash in the bank short-term. All this money is going straight to companies so a stable global equity fund or some kind of managed pension feels way more secure than letting it sit in the bank.

AlmightyCushion

sportsfan90 wrote: »

As someone who was about to start a pension this year, I’m now undecided as to when’s the best time to do so. I know it’s always said the best time to start a pension is today, but Covid has really thrown me and maybe my money is better off going into my bank account for the time being.

With the economic damage, especially if further Covid waves and lockdowns happen, maybe I’d be better off waiting another 6 months to see if there’s a bit of stability. Then again now could be the perfect time to start when many investment prices are down. Who bloody knows.

Start it now. With the tax savings and any employer contributions you will still be up even if the market tanks. I have only been contributing to mine a few years but when the market dropped back in March or April, my pension fund was still worth more than I would have got had I not contributed to it. As a higher rate tax payer, every euro you contribute to your pension only costs you about 50 cent thanks to the taxes you would pay on receiving it as income. If you employer contributes then you get even more going into your pension.

With my employer contributions and tax savings from contributing to a pension, the market would have to drop probably 70+% for me to be worse off than taking it as pay and sticking it in my back account.

[Deleted User]

Yellow_Fern wrote: »

https://www.rte.ie/news/business/2020/0714/1153284-age-population/

Yes, I know we have an ageing population but my point was .........

"Like, no public health system and folk expected to carry the whole cost of health insurance ..... could you imagine that in Ireland where we have a growing entitlement culture.

Our public transport here is effectively subsidised by the state via "free" travel for pensioners and other folk who qualify.

The Swiss example sounds like a way not to do it really. You won't have Mr & Mrs Murphy from Finglas going to Spain for half the year as they can't afford to stay here on the NC pension in their corporation / HAP paid / affordable house"

Again, it's been mentioned you need 88k to be a retired couple in Switzerland.

Jim2007

sportsfan90 wrote: »

Who bloody knows.

All the historical research tells us....

If you are just starting a pension, then I assume you have at least 30 years to go and that means 5 or 6 recessions to go....

When you are young recessions means opportunity - an opportunity to load up while stocks are cheap...

sweet_trip

I don't really understand pensions but I have a public service pension and apparently, according to everyone I work with and all the things I've heard over the years from colleagues, and people who are now retired who come back into the office the PS pension is worth less than the dole per week.

We constantly have reps coming in to try get us to do voluntary contributions to increase the payout but i don't know.

From what I gather, the PS pension is a ticking time bomb and we might never see it.

Geuze

sweet_trip wrote: »

I don't really understand pensions but I have a public service pension and apparently, according to everyone I work with and all the things I've heard over the years from colleagues, and people who are now retired who come back into the office the PS pension is worth less than the dole per week.

We constantly have reps coming in to try get us to do voluntary contributions to increase the payout but i don't know.

You should investigate and study the schemes, rather than depending on what others say.

The pre 2013 PS schemes are easier to understand: pension is typically 50% of final salary.

Jim2007

sweet_trip wrote: »

I don't really understand pensions but I have a public service pension and apparently, according to everyone I work with and all the things I've heard over the years from colleagues, and people who are now retired who come back into the office the PS pension is worth less than the dole per week.

We constantly have reps coming in to try get us to do voluntary contributions to increase the payout but i don't know.

From what I gather, the PS pension is a ticking time bomb and we might never see it.

So if you believe all you hear, you might not have enough money to live on in retirement......

Would not be a good idea to put some time into this and get a handle on it, while you still have time to make some adjustments???

sweet_trip

Jim2007 wrote: »

So if you believe all you hear, you might not have enough money to live on in retirement......

Would not be a good idea to put some time into this and get a handle on it, while you still have time to make some adjustments???

I could add contributions but the way everyone, in real life, on the news and on the internet seems to talk is that the pensions are a ticking time bomb so would it be worth my time if I end up losing it all?

I'm very skeptical of private pension schemes too. A lot of them to me, and some other people I've spoken to (ex salesmen) are of the opinion a large portion of them are scammers.

Geuze wrote: »

You should investigate and study the schemes, rather than depending on what others say.

The pre 2013 PS schemes are easier to understand: pension is typically 50% of final salary.

You're right, I should but I've never really been provided any info on how to look into them. My contract is very vague about it.

A retired colleague recently said after 35 years in the job he left with €20,000 goodbye money and €180 a week.

I don't know if thats good but everyone at work seems to think its not.

[Deleted User]

sweet_trip wrote: »

I could add contributions but the way everyone, in real life, on the news and on the internet seems to talk is that the pensions are a ticking time bomb so would it be worth my time if I end up losing it all?

.....t.

If a default strategy is followed it's more or less impossible to lose much if any of a few decades contributions.

[Deleted User]

sweet_trip wrote: »

..... is very vague about it.

A retired colleague recently said after 35 years in the job he left with €20,000 goodbye money and €180 a week.

I don't know if thats good but everyone at work seems to think its not.

What was his salary?

S.M.B.

sweet_trip wrote: »

I could add contributions but the way everyone, in real life, on the news and on the internet seems to talk is that the pensions are a ticking time bomb so would it be worth my time if I end up losing it all?

I'm very skeptical of private pension schemes too. A lot of them to me, and some other people I've spoken to (ex salesmen) are of the opinion a large portion of them are scammers.

You're right, I should but I've never really been provided any info on how to look into them. My contract is very vague about it.

A retired colleague recently said after 35 years in the job he left with €20,000 goodbye money and €180 a week.

I don't know if thats good but everyone at work seems to think its not.

This advice and opinion sounds so vague and unfounded for such a key component of someone's financial planning. It's on a similar level to saying "I don't use banks and stash my cash under my mattress because a colleague told me he got burned by a bank in the recession" imo.

There is no reason not to educate yourself on the matter but the fact that you are posting here means that you are looking for more info and not stuck with a perception based on a few lads at work.

If you get all the info and still feel like pensions are not for you for whatever reason then fair enough but at least get some understanding of the numbers involved.

Yellow_Fern

sweet_trip wrote: »

I could add contributions but the way everyone, in real life, on the news and on the internet seems to talk is that the pensions are a ticking time bomb so would it be worth my time if I end up losing it all?

I'm very skeptical of private pension schemes too. A lot of them to me, and some other people I've spoken to (ex salesmen) are of the opinion a large portion of them are scammers.

The big thing is keeping fees under control. It has never been easier to do this.

donkey balls

Both my pensions took a dive back in March/April due to the CV19, This is only the second time that they went down in value last been 08/09 but they have bounced back quicker this time around.
As others have mentioned now is a good time to start a pension regarding the tax incentives etc it is a no brainer
Especially if you can afford to make payments into one, Rather have the money in my fund than be it dead money giving to the tax man.