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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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homes_for_all

6 wrote: »

Translates as:

a) I don't have one, so I'll label it a scam.
b) I don't have a clue what a pension is.
c) Combination of a and b

I'm securing my old age finances without losing it to snake oil salesmen or financing global misery. How about you?

[Deleted User]

Pensions are a scam

Translates as:

a) I don't have one, so I'll label it a scam.
b) I don't have a clue what a pension is.
c) Combination of a and b

homes_for_all

McGaggs wrote: »

You think government bonds aren't funding war and climate change?

Green Bonds don't.

The J Stands for Jay

homes_for_all wrote: »

Corporate bonds, not others.

You think government bonds aren't funding war and climate change?

homes_for_all

McGaggs wrote: »

Bonds contribute to exactly the same things as stock market investments. I'm sure the environment would be much better off of the fold remained unextracted.

Corporate bonds, not others.

GreeBo wrote:

You cant have it both ways, either Joe is managing his own pension and does need to have the most basic of knowledge OR Joe is paying someone else to do it and they will do it for him.

Fair point. We should have financial advice of this kind as part of a public service done by the government.

The J Stands for Jay

Amirani wrote: »

You can either buy an annuity or set up an ARF.

Annuity will give you a set amount every year for the rest of your life, and there will be no fund left at the end.

ARF will mean you can draw down as much as you choose each year (though there is a minimum you need to). There's a tax-free portion, but then you'd pay 20% up to a cut-off. When you die, anything left in the fund can be inherited.

The payments from ARFs and annuities are treated the same as a salary for tax.

The J Stands for Jay

homes_for_all wrote: »

Well for 1) the above don't contribute to wars, climate change or killing people and wrecking lives.

I think that's a good starting point

Bonds contribute to exactly the same things as stock market investments. I'm sure the environment would be much better off if the gold remained unextracted.

Geuze

thebourke wrote: »

my question...say for example you get to retirement (i have 18 years to go yet!)

and you pension is worth 400k for example
you can get 25 percent tax free at retirement,which would work out at 100k

Can someone explain what would happen the other 300k?
How is it taxed?How do they work out yearly repayments?

One option is to buy an annuity with the 300k, but that is no longer popular, due to low annuity rates.

Typically, the 300k is placed in an ARF, and you draw an income from the ARF.

The income is taxed as normal.

GreeBo

homes_for_all wrote: »

High risk? Odds are that your average Joe will have a 30-50% exposure to the American market (as an example) in a standard fund that a company will default them to. Look at what I said, it's behaving completely irrationally. It's a fradulent system which cannot keep ignoring reality.

But you're now putting blame on Joe for not being financially up to date on the market! That's what the government want!

Gold, property, bonds, your own residence (i.e. no rent or mortgage) in old age.

No, Joe doesnt need to be financially up to date, he just needs to follow the advice of any and every pension advisor.
It doesnt matter a damn if your pension is in stock and they plummet unless you are planning on retiring in the immediate future.

You cant have it both ways, either Joe is managing his own pension and does need to have the most basic of knowledge OR Joe is paying someone else to do it and they will do it for him.

Other than rants, do you actually know anything about pensions?

Amirani

thebourke wrote: »

=Can someone explain what would happen the other 300k?
How is it taxed?How do they work out yearly repayments?

You can either buy an annuity or set up an ARF.

Annuity will give you a set amount every year for the rest of your life, and there will be no fund left at the end.

ARF will mean you can draw down as much as you choose each year (though there is a minimum you need to). There's a tax-free portion, but then you'd pay 20% up to a cut-off. When you die, anything left in the fund can be inherited.

Amirani

homes_for_all wrote: »

Pensions are a scam. Stay well clear.

Does the following sound right to anyone? We've got a global pandemic, businesses crumbling, unprecedented amounts of people out of work, the governments of the West are printing money with no end in sight, whole industries are disappearing... and yet, the market is up!

I've heard a lot that "this is different" (lol) and that "demand is still there" (lol). But the fact is, the system is rotten and this house of cards has to come crashing down.

We all saw the old people who lost everything in 2008. The snake oil salesmen only want their fees. Your fund goes up, they take a piece. Fund goes down? That's your problem, I'll still be having my fees.

Take a look at the graph of the S&p 500. It doesn't look right. Keep well away from pensions and stocks. The people of the 1920s would like a word with you!

Just because you don't understand things doesn't make them a scam.

AlmightyCushion

homes_for_all wrote: »

High risk? Odds are that your average Joe will have a 30-50% exposure to the American market (as an example) in a standard fund that a company will default them to. Look at what I said, it's behaving completely irrationally. It's a fradulent system which cannot keep ignoring reality.

But you're now putting blame on Joe for not being financially up to date on the market! That's what the government want!

Gold, property, bonds, your own residence (i.e. no rent or mortgage) in old age.

You can get all the benefits of a pension (tax incentives and company contributions) and still invest in gold and bonds. Property too if you count REITs. I wouldn't recommend it but you can do it if you want.

thebourke

my question...say for example you get to retirement (i have 18 years to go yet!)

and you pension is worth 400k for example
you can get 25 percent tax free at retirement,which would work out at 100k

Can someone explain what would happen the other 300k?
How is it taxed?How do they work out yearly repayments?

homes_for_all

NIMAN wrote: »

The old people who lost everything in 2008 often had their money in bank shares, which became more or less worthless.

If they had their money in a pension scheme, it would have went down, but not vanished. You haven't a clue what you're talking about.

Plenty of companies schemes wound up too.

homes_for_all

McGaggs wrote: »

What makes these markets any different to stock markets?

Well for 1) the above don't contribute to wars, climate change or killing people and wrecking lives.

I think that's a good starting point

The J Stands for Jay

homes_for_all wrote: »

Gold, property, bonds,

What makes these markets any different to stock markets?

NIMAN

homes_for_all wrote: »

Pensions are a scam. Stay well clear.

Does the following sound right to anyone? We've got a global pandemic, businesses crumbling, unprecedented amounts of people out of work, the governments of the West are printing money with no end in sight, whole industries are disappearing... and yet, the market is up!

I've heard a lot that "this is different" (lol) and that "demand is still there" (lol). But the fact is, the system is rotten and this house of cards has to come crashing down.

We all saw the old people who lost everything in 2008. The snake oil salesmen only want their fees. Your fund goes up, they take a piece. Fund goes down? That's your problem, I'll still be having my fees.

Take a look at the graph of the S&p 500. It doesn't look right. Keep well away from pensions and stocks. The people of the 1920s would like a word with you!

The old people who lost everything in 2008 often had their money in bank shares, which became more or less worthless.

If they had their money in a pension scheme, it would have went down, but not vanished. You haven't a clue what you're talking about.

The J Stands for Jay

homes_for_all wrote: »

We all saw the old people who lost everything in 2008.

Yes. Those were the old people who insisted they were smart and only held Irish Bank shares for their pension.

homes_for_all

GreeBo wrote: »

If this happens to Joe, then Joe is an idiot who ignores the most basic advice about pensions.
i.e. Don't keep it in high risk areas when are are planning on accessing it anytime soon.

Care to elaborate on the "any number of means" when you exclude the stock market and a pension?

High risk? Odds are that your average Joe will have a 30-50% exposure to the American market (as an example) in a standard fund that a company will default them to. Look at what I said, it's behaving completely irrationally. It's a fradulent system which cannot keep ignoring reality.

But you're now putting blame on Joe for not being financially up to date on the market! That's what the government want!

Gold, property, bonds, your own residence (i.e. no rent or mortgage) in old age.

GreeBo

homes_for_all wrote: »

The whole pension industry is a scam.

Let's examine it. At the bottom you have your average Joe. He's told to invest in the market to secure his old age.

1) The government encourage this so they can leave the oldies to the wolves in a few years. "No money for heating the house? Tough, you should have invested in a different fund!"

2) Employers love it as it costs them less. They include pension contributions are part of your package, but ask for the equivalent in pay now? Nope. Your package is lacking to say the least.

3) The market... So your average Joe is pumping money into big Pharma, funding wars and war industries, tobacco etc etc. and to top it off, big oil! Let's just destroy the planet and kill people!

4) The market again... it crashes every few years, to siphon off Joe's money. Of course the big boys don't worry.

5) The pension industry. Excessive fees, no accountability, and preying on people's financial illiteracy.

Save for your old age by all means through any number of avenues, but stay clear of the pension industry and the stock market.

If this happens to Joe, then Joe is an idiot who ignores the most basic advice about pensions.
i.e. Don't keep it in high risk areas when are are planning on accessing it anytime soon.

Care to elaborate on the "any number of means" when you exclude the stock market and a pension?

homes_for_all

howamidifferent wrote: »

Username says it all. Pay for nothing and expect everything.

The whole pension industry is a scam.

Let's examine it. At the bottom you have your average Joe. He's told to invest in the market to secure his old age.

1) The government encourage this so they can leave the oldies to the wolves in a few years. "No money for heating the house? Tough, you should have invested in a different fund!"

2) Employers love it as it costs them less. They include pension contributions are part of your package, but ask for the equivalent in pay now? Nope. Your package is lacking to say the least.

3) The market... So your average Joe is pumping money into big Pharma, funding wars and war industries, tobacco etc etc. and to top it off, big oil! Let's just destroy the planet and kill people!

4) The market again... it crashes every few years, to siphon off Joe's money. Of course the big boys don't worry.

5) The pension industry. Excessive fees, no accountability, and preying on people's financial illiteracy.

Save for your old age by all means through any number of avenues, but stay clear of the pension industry and the stock market.

Padre_Pio

howamidifferent wrote: »

Username says it all. Pay for nothing and expect everything.

Post count too.

howamidifferent

homes_for_all wrote: »

Pensions are a scam. Stay well clear.

Username says it all. Pay for nothing and expect everything.

homes_for_all

Pensions are a scam. Stay well clear.

Does the following sound right to anyone? We've got a global pandemic, businesses crumbling, unprecedented amounts of people out of work, the governments of the West are printing money with no end in sight, whole industries are disappearing... and yet, the market is up!

I've heard a lot that "this is different" (lol) and that "demand is still there" (lol). But the fact is, the system is rotten and this house of cards has to come crashing down.

We all saw the old people who lost everything in 2008. The snake oil salesmen only want their fees. Your fund goes up, they take a piece. Fund goes down? That's your problem, I'll still be having my fees.

Take a look at the graph of the S&p 500. It doesn't look right. Keep well away from pensions and stocks. The people of the 1920s would like a word with you!

Yellow_Fern

Top chief wrote: »

Hi I'm 29 soon and I want to open a private pension .
I'm not sure where to start or where to look.

I have 2 bank accounts with different banks as dont want all my money in one bank. I have a bit of money put away in a safe aswell for a rainy day

Wondering what is a good amount to put away into a private pension each month for a good return?

Also does it matter if I dont put any money In one month but put the following month .

There is a lot of flexibility on what you ask about, what you need to get hawkish about is fees. fees matter hugely for a 29 YO.

anewme

Liamo57 wrote: »

Im 62, got a great redundancy last year. Have a pension and a lovely part time job and my health. A pension is so important, life is brilliant, and I get up each morning abd I can do what I want Paradise..... thats how important a pension is.

Fair play!

That would be my exact dream as well!

Enjoy.

Henry Ford III

Top chief wrote: »

Hi I'm 29 soon and I want to open a private pension .
I'm not sure where to start or where to look.

I have 2 bank accounts with different banks as dont want all my money in one bank. I have a bit of money put away in a safe aswell for a rainy day

Wondering what is a good amount to put away into a private pension each month for a good return?

Also does it matter if I dont put any money In one month but put the following month .

Get a proper assessment done on your finances. It'll include quite a lot of stuff including a financial income and expenditure statement, a pro forma balance sheet (assets and liabilities) and will suggest areas for action, if any.

From there if a pension makes sense you can get into risk and reward profiling, and look at costs etc.

I'd avoid the main Banks as they don't offer you access the entire market of providers.

You'll be paying for this either by way of a fee or commission. Your advisor is obliged to disclose you the amount.

Top chief

Hi I'm 29 soon and I want to open a private pension .
I'm not sure where to start or where to look.

I have 2 bank accounts with different banks as dont want all my money in one bank. I have a bit of money put away in a safe aswell for a rainy day

Wondering what is a good amount to put away into a private pension each month for a good return?

Also does it matter if I dont put any money In one month but put the following month .

Liamo57

I was just lucky it worked out the way it did. I count my blessings and know Im lucky. My pension is nothing to write home about but with the psrt time job I have ad much as I did when working. Its so lovely to have freedom, kids reared, a nice decent wife. Just to feck off into town for a coffee, go for a cycle along the canal.... all the simple things....maybe a few cans norw and then in the afternoon and not fee guilty. A colleague, same age, retired same time as me and he died 3 months ago.

Dodge

Liamo57 wrote: »

Im 62, got a great redundancy last year. Have a pension and a lovely part time job and my health. A pension is so important, life is brilliant, and I get up each morning abd I can do what I want Paradise..... thats how important a pension is.

Great to hear you're doing well.

This is pretty much the key idea here. No one with a pension thinks "I wish I didn't have one" and plenty of people without one think "I wish I had a decent pension"