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I don't know what a pension is

  • 08-02-2023 11:16am
    Registered Users Posts: 261 ✭✭

    Hopefully the mods don't move this question, as it's more for the people that don't read the investing or pensions forum.

    I have friends and family who are 35+ and haven't set up a pension. I image too as they think about buying a house or having children that it will get forgotten about or left aside.

    My question (and worry) is what happens in their 50s or 60s? 70s?

    What do people do at that age when they don't expect to get anything other than the state pension?

    Move somewhere cheaper in Ireland? Cut back on everything? Hope for an inheritance? Save frantically in their 50s?



  • Registered Users Posts: 8,510 ✭✭✭lawrencesummers

    Its a type of budget accommodation in europe

  • Registered Users Posts: 17,989 ✭✭✭✭rob316

    Foolish, I set mine up when I was 18, always paid into it, any increase in salary, I increase the contribution.

    The thought of living on the state pension only terrifies me, its a pittance.

  • Registered Users Posts: 2,172 ✭✭✭kowloonkev

    The state pension is more than adequate for what old people do be doing. Drinking tea and eating ham sandwiches and mashed potatoes. There's no need to panic about pensions unless you want to spend your retirement showing off.

  • Registered Users Posts: 17,989 ✭✭✭✭rob316

    Ok your retire and your earning a salary of 60k, bang your now getting about 13k a year, still have the same bills. It's some drop

  • Posts: 0 [Deleted User]

    How many older folks have you spoken to regularly that’s what you think they all do?

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  • Registered Users Posts: 13,133 ✭✭✭✭Geuze

    I get your point, but note that the net-to-net fall will be less.

  • Registered Users Posts: 4,766 ✭✭✭Deeec

    Alot of people simply cannot afford to put anything into a pension. It takes everything they earn just to live a basic life and provide for their family.

    People who dont have a pension and are still renting will be in huge difficulties when they retire - this is going to be a big problem in years to come.

    For most people by retirement they will have their families raised, mortgage paid etc so they are able to live on a much smaller amount than when they were younger.

  • Registered Users Posts: 13,133 ✭✭✭✭Geuze

    Are these people in employment?

    If so, from 2024, they should be automatically enrolled in a work pension.

  • Registered Users Posts: 2,172 ✭✭✭kowloonkev

    You mean 60K take home or before tax? I don't see how you have the same expenses in retirement. You should have the mortgage paid. You don't have transport costs. Free transport. Free GP. All kinds of benefits beyond the basic pension. There's no chance the government are going to allow the elderly to starve to death or freeze to death. They're always the first to be looked after.

    If you have a private pension then good for you. All I'm saying is for those people who live a fairly basic lifestyle, they don't need to be afraid about not paying into a private pension.

  • Registered Users Posts: 505 ✭✭✭Kurooi

    I think people are generally short term focused. I met few that think even 1 year ahead let alone 40 years.

    To me the most important thing to do is own my house out right, gives me a place to live and attach to, but also a big asset to fall back on. I started my pension at 21 but really only because my employer matched it, told me it's a BIK and it'd be a waste if I don't take it, so in a way I just signed into it without giving it a thought. Happy enough that I did , it accumulated.

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  • Registered Users Posts: 17,989 ✭✭✭✭rob316

    Say after tax that's still about 30k difference. Ya you can live basic life on the money but your only 66, you could potentially live another 25 plus years and if you want to really enjoy your retirement years you need alot more than the state pension.

    People have a hard time thinking about 30 years from now but it will come fast and you should be leaving yourself comfortable for when the time comes.

  • Registered Users Posts: 12,256 ✭✭✭✭Calahonda52

    delusional post at best, attention seeking nihilist perhaps

    “I can’t pay my staff or mortgage with instagram likes”.

  • Posts: 0 [Deleted User]

    When I left school aged 17 in 1978 my father was always banging the drum hard about the pension, I ended up in a public service job and have that modest pension, and very thankfully inheritance as the only child. I now have an absolutely huge appetite for travelling and having fun (eg parachute jump), which a basic state pension wouldn’t satisfy. My father’s mantra bored me when young but I knew he was right and I am glad to be reaping the rewards of having listened to him.

  • Registered Users Posts: 6,797 ✭✭✭amacca

    True...but it was entertaining in a shock jock kind of way!

    There's always an opening in the market for such opinions to stir up outrage/texts/clicks etc

    I'm interested in pensions myself but tbh I think its good to have assets too .....if you can manage both even better

    If I was on a basic wage it would be get a place to live first, health insurance and then think about pensions

  • Registered Users Posts: 6,797 ✭✭✭amacca

    A decent parent and a kid that listens to them is a great combo👍🏻

    One or both can sometimes be missing

    Post edited by Paul on

  • Registered Users Posts: 2,887 ✭✭✭Francis McM

    We cannot all get a public service pension or inheritance to travel around the world and parachute jump our time away. Most private sector people I know cannot afford to put much in to a pension, so most private sector pensions are very little, like 50 euro a week.

    Post edited by Paul on

  • Registered Users Posts: 5,720 ✭✭✭pappyodaniel

    After my experience on the pandemic payment I'd find it rather easy to get by on a state pension. I'm single, no kids and my house is paid for.

  • Registered Users Posts: 2,232 ✭✭✭TooTired123

  • Registered Users Posts: 10,594 ✭✭✭✭Furze99

    This is true - big difference as regards pensions between your average worker in a CS / PS employment and those in the private sector / self employed. The smugness of the former is often notable. The best most can do now is I think save what they can in a pension scheme and use this to supplement the eventual state pension but it will still be modest enough for many.

    If I was running the place, I'd remove all pension schemes from workplaces both PS and private, pay people that much more and let them take responsibility for their own pensions. That'd level things up a bit.

  • Registered Users Posts: 261 ✭✭Jambonjunior

    I'm just curious if there are more people that are approaching retirement or are in retirement without an extra private pension?

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  • Registered Users Posts: 3,553 ✭✭✭Buddy Bubs

    People do have responsibility for their own pensions.

    Either spend a bit of time, effort and money on it to make sure you have enough or don't.

    Many don't. Many more wouldn't in your scenario.

  • Registered Users Posts: 4,766 ✭✭✭Deeec

    Of course there is loads of people that are nearing retirement and dont have a private pension. You dont seem to understand that many lower paid workers simply cannot afford to put money into a pension. Its not that they are stupid, they just cannot afford it!

    I myself have a PRSA which I put €200 a month into and my employer matches - thing is its nowhere near what I should be putting in in order to give me a decent pension. It will give me a small pension on retirement which is better than nothing. Husband has a small PRSA too. €200 per month is all I can afford though with mortgage, 3 kids to feed, clothe and educate, house to run etc. We have a reasonable income and dont live a high life but there is nothing left at the end of the month. We will own our house in retirement and for us the roof over our head in old age is more important. I would put home ownership above a pension - owning a home should be priorty for everyone.

    There is literally no point in people starving themselves and having the heating off in order so they can pay into a pension.

  • Registered Users Posts: 10,594 ✭✭✭✭Furze99

    Can't have it both ways - you say people 'do have responsibility for their own pensions' but they don't really if the state just pays it out of current taxation in case of PS or employers pay a deal of it.

    Real responsibility is giving the cash to workers and let them take responsibility for their own pensions and/or private healthcare.

  • Registered Users Posts: 10,594 ✭✭✭✭Furze99

    Another side too of having a large pension pot and property assets is that when it may come a time that you need nursing home care, the state will strip it out to a large extent through the 'Fair Deal' scheme. If you've no private pension or property, you still get looked after. That's what 'Fair Deal' is all about - those who save and pay contribute a lot, those who don't are carried by the former.

  • Registered Users Posts: 27,114 ✭✭✭✭GreeBo

    So fingers crossed you end up in a home needing to be looked after huh?

    Not paying the minimum to get employer matching is incredibly short sighted.

    Anything you put in is tax free, you will get something from the employer and it has 40 odd years to grow and compound.

    Its literally free money,

  • Registered Users Posts: 3,553 ✭✭✭Buddy Bubs

    I have a PRSA from years ago, a personal pension from my time of being self employed and now I have an occupational pension with employer contributions as well as my own. Private sector.

    Nobody forced me into any of them, I made those decisions myself as to when to start, how much to put in, if and when I want to stop I will.

    All about the tax relief for me, always has been, currently paying 500 a month in and employer putting in 200. Net cost to me is 300 from my take home pay.

    Through the rough and the smooth over last 12 years the €6000 I put into the PRSA between 2010 and 2011 when I stopped paying is worth approx €15000 now.

    The personal pension which is also paid up now has grown since 2018 when I stopped paying into it, not sure of exact gains.

    The occupational pension is ongoing and I just keep paying in and have 25/30 years to retirement still, hopefully I will remain in this employment.

    Public sector employees can do AVCs if they want.

  • Registered Users Posts: 1,180 ✭✭✭Viscount Aggro

    No offence, but 15K in a pension is worth F - all

    Income of 600 per year at 4% withdrawal rate.

  • Registered Users Posts: 19,143 ✭✭✭✭Donald Trump

    You can cripple yourself to get into a home at 65 if you want.

    I'll be spending a decade blowing me pension on coke and hookers first.

  • Registered Users Posts: 3,553 ✭✭✭Buddy Bubs

    No offence but you didnt read my post, you picked 1 line to comment on. The PRSA alone is worth 15k now, it has increased by 250% from 6k to 15k in 12 years just sitting there. I havent paid into it since 2011. It will sit there for another 25 to 30 years, unless I combine it into occupational pension, which I very well may do.

    Since then I have set up a personal pension which I paid into until 2018 when I ceased self employment and I have paid into an occupational pension since then and still pay into it and will continue to until retirement or until I cant afford to anymore, hopefully that never happens.

    The fund will be in the hundreds of thousands with a bit of luck and good management and I won't be doing the 4% annuity either....ARF/AMRF all the way.

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  • Registered Users Posts: 12,964 ✭✭✭✭bnt

    You can think of a private pension as insurance against retirement, with a couple of differences: most people retire, and the payouts are usually (not always) in instalments. It’s not surprising to me that companies do both insurance and pensions, since there are a lot of similarities. In both cases, the companies have actuaries - number-crunchers - who work to ensure they make a profit.

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