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Pension Age - should it stay at 66?

Sam Russell

The Taoiseach has said he believes the State pension age should not go beyond the age of 66, saying there is a "clear groundswell" within his party to retain it.

Micheál Martin said this would have "clear implications for PRSI" and that extra contributions would be needed to ensure the pension age was not increased.

Of course, that would be fine if the age of the population was not increasing with those over 66 living to a much riper age than their parents did (or are still living to).

Surely there is a better formula that can be devised to reduce the future burden on the PRSI fund.

Perhaps remove the notion of a single age for retirement, while having a flexible age at which the state pension can be drawn down. People should be allowed to retire at any age between 60 and 70 without being forced to remain at work till it suited them. Currently, some employment forces retirement at 65 - whether that suits or not.

State pension could be structured so that early retirement means a lower state pension till 70, or late retirement means a deferment of state pension, meaning a larger pension when it is taken up. Obviously, the actuaries would calculate the numbers to make sure it balances out fairly.

If the state pension qualification remains fixed at 66, then those working will be paying pensions to a larger and larger number, which will be a real burden - possibly unsustainable.

So what to do?

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Sam Russell

The pension age of 66 has been captured by the political populists - whose main interest is to get votes. The more the pragmatic politicians rail against it, the more the populists crank up their mantra.

The only way the pragmatists than build a bulwark against this mantra would be to remove the absolute age of 66 and make it flexible - anyone can retire early or late, but the state pension will be less for those that retire early. No mandatory retirement age, and the state pension is dependent on PRSI contributions.

By following such a regime, a sustainable model could work, but paying state pension out of current contributions is definitely unsustainable as the number getting the state pension rises.

Jim_Hodge

https://www.boards.ie/discussion/comment/119283279#Comment_119283279

You know you can contribute to a pension fund and get your tax free lump sum too?

spontindeed

https://www.boards.ie/discussion/comment/119282979#Comment_119282979

Not really when you compare the generous public sector pensions to the private sector (public sector pensions levy is needed). The other day I read that Micheal Martin is to throw more money at the public sector under the pretext of 'pay restoration' (why do politicians call it that given it was never sustainable in the first place).

Also, when you look at the sweetheart tax deals offered to big corporations in Ireland, the retirement age could be restored to 65.

titan18

Retirement age should increase tbh especially with people living longer. Should move to 68 at a minimum imo.

Wanderer78

https://www.boards.ie/discussion/comment/119283338#Comment_119283338

theres actually no need for this at all, people spend long enough working, they should be able to retire at an appropriate age, to enjoy the remainder of their life in relative peace

The Mighty Quinn

https://www.boards.ie/discussion/comment/119283178#Comment_119283178

I don't disagree. I'm paying 20% to pension at the moment, maxing out on relief.

I'm in favour of auto enrollment. You can't trust people to plan for their own future...

Wanderer78

https://www.boards.ie/discussion/comment/119283637#Comment_119283637

...or what happens if current workers require all of their earnings to meet their current needs!

The Mighty Quinn

https://www.boards.ie/discussion/comment/119283649#Comment_119283649

There's that argument, but honestly I think many people spend too much unwisely. Not all. There are genuine cases, but people who've over extended on loans for example, instead of buying a 10K car have bought a 25K car, locked in to repayments for 5 years at over 300 a month, and that's not one bit uncommon. Then these people complain there's nothing left every month after bills and groceries, ignoring some of that outgoing is of their own making from a year or three ago.

Danzy

https://www.boards.ie/discussion/comment/119283318#Comment_119283318

So remove all the corporate tax breaks. Half the public services pension rate.

Pension at 66 is still unsustainable.

If it was only slightly unsustainable ...

Wanderer78

https://www.boards.ie/discussion/comment/119283666#Comment_119283666

...theres clearly something fundamentally failing at policy level in regards critical needs such as health care and property needs, yes people do spend unwisely, but theres clearly something fundamentally wrong in regards these critical needs, we cannot keep pointing the finger at individuals, while simply ignoring such needs, theres clearly something fundamentally failing! again, 'behind ever bad borrower, is a bad lender'!

Nody

https://www.boards.ie/discussion/comment/119283732#Comment_119283732

I see; so it's not personal responsibility that people go eat fast food daily it's the system. It's not individual responsibility when people sit at the pub complain about lack of money every night; it's the system's fault. Sorry but responsibility start at the individual; that includes fiscal as well as voting in the appropriate people to government to enact the policies. Blaming this on "oh but it's a system issue" is removing the blame from where the actual ownership sits; which is the individual. This is as well the reason politicans such as Farage, Boris etc. got where they got in the first place by offering a handy "system issue" to blame it all on over individual responsibility. People get the government they deserve as the saying goes; got an issue with government policy then look at the electorate who voted them in for who to blame and who has the power to change it.

Wanderer78

https://www.boards.ie/discussion/comment/119283779#Comment_119283779

...you gotta love conservatives, they ll really die with this stuff, wont they!

....once again, we dont live on this prefect planet, whereby we can all just provide ourselves with our needs, and to add insult, in an environment of rising wealth inequality(what we re experiencing right now!), this is further impeded, or this causes further issues in regards 'social mobility'!

...it really is time for us to grow up in regards such nonsense now!

Nody

https://www.boards.ie/discussion/comment/119283803#Comment_119283803

I agree on the growing up; the only difference is I actually believe that voters should decide rather than as you appear to think that the state should decide everything for the voters without input. Yes; there's inequality and plenty of it; you know who decides who's in government? The voters. You know the people I'm holding accountable for deciding who's in government and the policy said government executes. Are you claiming that poverty somehow stops someone in Ireland to go vote (I'd fully agree if we talked about the USA which is disgraceful in it's implementation as a side note)? That being poor means you can't cast your vote or tell the politicans (and there are plenty of them) who comes around knocking on the door to convince you that they are the people who should represent you? I actually think adults, who at least according to the law are suppose to be capable of making their own decisions, should actually be held accountable to you know, make decisions on their own and live with the consequences of making decisions. Novel idea and if that makes me conservative then sure, what ever rings your bell I guess.

JoChervil

I think retirement should be voluntarily from certain age like for example from 60. If you retire at 60 you would be paid less weekly, than average, if you retire at 66 you would be paid full amount and if you retire later, you would be paid more respectively.

I think people should have a choice, if they would prefer to have more money or more free time.

Wanderer78

https://www.boards.ie/discussion/comment/119283829#Comment_119283829

...oh dont worry, thats gonna happen very very soon, it clearly obvious that this government is toast, in particular the main parties, but what extent of damage will be done by then, particularly in relation to our most critical sectors, and will it be possible to change this!

...its also understandable why many dont vote, as does it really matter, and does our political systems truly exist for all peoples needs, or for only certain interest groups! maybe these folks seem to think so, maybe.....

...in order for people to have a fair crack of the whip, things kinna need to be reasonably fair to begin with!

Sam Russell

Personal responsibility only goes so far.

The political system changes the balance of personal choices. Making pension funds tax exempt should tip the general worker to contribute to a pension fund. However, high rents and very high property prices reduce disposable income that would allow such contributions. Now there is an opt-in so that more will subscribe.

Personal spending is a personal choice. Some save to spend in the future, while others borrow to spend now. Your current income and future income should be a guide. Living a champagne lifestyle on a lemonade income can only lead to poverty as debt catches up. If borrowing gets out of control, then the future can be grim. The same applies to pensions. The state pension can never be sufficient to provide a 'good lifestyle' but is only a safety net.

If the state pension age does not increase as the average age of the population increases and those retired getting the state pension increases, then the following choices apply.

The Gov increases PRSI to pay for it, but lower proportion working will mean an ever increasing PRSI charge.
The state pension is reduced in real terms, which pushes the lower fraction of recipients into poverty.
The state pension is means tested - if you do not need it, you do not get it, like the non-contributory one.
Income tax or other taxes must rise to pay for an ever increasing cost of the state pension.

The electorate will choose - or not.

[Deleted User]

The electorate will choose and we"ll have an extremely large block of older voters.

So it'll be option 1 with option 4 and cutbacks in day to day spending like education which won't be required by an ageing population.

They'll also have an interest in keeping property prices fairly spicy because for many property is a pension investment.

Loafing Oaf

https://www.boards.ie/discussion/comment/119283909#Comment_119283909

It's obviously going to be some combination of 1 and 4 because any party that even tentatively proposed 2 or 3 would be obliterated at the ballot box...

Geuze

https://www.boards.ie/discussion/comment/119283279#Comment_119283279

There is.

The PRD was made permanent, this has already happened.

It is now renamed the Additional Superannuation Contribution (ASC), and it is permanent.

It is 10% of wages above 34k.

HerrKuehn

There needs to be honesty from the government around "raising the pension age", what they are really talking about is raising the private sector pension age. It will have no impact on the amount or timing of pension payments to current public servants.

spontindeed

https://www.boards.ie/discussion/comment/119283194#Comment_119283194

Their citizenship sure is guarded, unlike here. The illegal migrant amnesty that Helen McEntee gave to 17,000 recently. I'm betting that number will be even higher if you add family reunification. They will also be entitled to social welfare, grants, housing, etc. If Government wants to save money, they should reverse this amnesty.

The third level sector is also going on a hiring binge by hiring more staff at Universities while at the same time the Government is preaching that we must tighten our belts with regard to PRSI. The one thing I always find interesting is that these so called "University academics" have all the answers as to what taxes and charges the private sector should be paying, yet they are notoriously silent on the sweetheart tax deals that big corporations enjoyed from Ireland, such as the 0.005% effective tax rate that Apple got from the same Government that now tries to tighten the screws on ordinary people further.

c.p.w.g.w

https://www.boards.ie/discussion/comment/119283338#Comment_119283338

Have you seen the general health of people these days...

We may smoke & drink less than previous generations, but T2D & Obesity are on the rise in every age group, and the government's of the world have no hope of stopping it...people may be living longer, but certainly those extra years aren't in good health

Calahonda52

https://www.boards.ie/discussion/comment/119282979#Comment_119282979

It actually political cowardice just as was the water charges capitulation because of SF/IRA

Average life expectancy is now 82, was 70 in 1965

https://www.statista.com/statistics/1072200/life-expectancy-ireland-historical/

spontindeed

https://www.boards.ie/discussion/comment/119287326#Comment_119287326

That's why the political class in Government never included the public sector pensions deficit of €200 billion on the state balance sheet (it's off the books!). Public sector gratuities and pensions needs to be looked at.

Anyway, if Government tries to auto enroll me in a private pension, I will opt out (you will only have 6 months to opt out). I work in the private sector.

[Deleted User]

I'll have 49 years work done by the time I'm 66. How long should I have to work for? Until I die?

Calahonda52

Editing this post

A poster asked:

Anyway, if Government tries to auto enroll me in a private pension, I will opt out (you will only have 6 months to opt out). I work in the private sector.

I asked

why?

Gant21

https://www.boards.ie/discussion/comment/119288476#Comment_119288476

Someone needs to pay the Ukrainian and dole bill so yes that be great.

Jim2007

https://www.boards.ie/discussion/comment/119288504#Comment_119288504

With the Irish birthrate declining, you better hope there is a young Ukrainian round to pay you pension when the time comes, because without then you'll be on a very sticky wicket. The usual one step thinking will get you every time.

Jim2007

https://www.boards.ie/discussion/comment/119288493#Comment_119288493

And what will you do instead? In the US they have all kinds of self directed pension options, but recent research show that the average household reaching retirement age have a net worth of around $10k, do you think you can do better?

Calahonda52

My bad Jim ( good to see you again)

This was what was posted

Anyway, if Government tries to auto enroll me in a private pension, I will opt out (you will only have 6 months to opt out). I work in the private sector.

I asked

why?

( because with the taxman putting in half......)