I don't know what a pension is

There are ways to play the system, if you work on it.

You may not need a pension, if you have enough money saved.

The way i look at it once the mortgage is paid and kids educated i hope to be in a position to retire and be healthy enough to enjoy it. Be it resume travelling, out meeting friends etc. Ill have worked long enough. Have been tipping away at a pension since 21 always had one through work. In the last 2 yrs ive decided to add 1% percent per month which my employer matches to give it a boast. Thinking of increasing my contribution if budget allows the next few months

Exactly what happened to the father of a friend. Self made man with a successful business. Sold it all off at 65 and pocketed a couple of million in cash. Put the lot into BoI shares as a safe option even though advised not to do so. Lost pretty much everything including multiple properties he had yet to finish paying off (including his intended retirement home) when the banking crash hit about 6 months later. Had to start again from pretty much scratch and set up a brand new business. Its been very successful but he's still working in his seventies, not ideal.

That's exactly the point I was trying to make Andrew, conservative investing over time with a 3-1 ratio on your costs vs actual contributions, can really amount to something. Usually the employer match is better than the employee contribution.

@Frances McM: I'm not trying to give specific investment advice as I'm no expert and besides there's a forum for that. I also want to stay out of the private vs public sector debate, however back in the 50's when my father started in the co. co there were many private companies that had much better pension schemes than his, and most had better salaries. (The PS didn't catch up until the boom). Even if current private pensions aren't attractive these days, many companies will have life cover of 3-4x salary, people will have their own life cover which is very cheap if you start when you're young and healthy, and there's mortgage cover as well, all of which would add up to the same outcome as I described above re my father dying young with dependents. There are many ways to skin a cat.

I'm not saying I did all this by the way, but it's definitely what I'd do if I was starting over in my 20's.

You are taxed on your pension once you're recieving more than €18k a year, right? ... someone might confirm this ?

So lets say, once retire, you get 13k from your state pension and 12k from your private pension, that 25k subject to income tax and USC, and PRSI.

Or if you get 20k a year private pension, thats 33k total subject to income tax and USC/PRSI.

Is there a downside to ploughing too much money into a private pension, as you,ll be taxed on it. Is it better to spilt it, ie. Some in a private pension, some in a savings account (which will be 100% your tax free for the future).

You'd need to take the tax savings of the pension into account in any such analysis. You can put €100 into your pension and only reduce your net salary by €60. Your savings account doesn't offer that boost.

This is almost guaranteed to happen.

The prudent will be asked to subsidize the spendthrifts in their retirement because of 'fairness'.

Remember the Irish Government stole around €2.4bn from private pensions during the last recession.

How much did all those people with pensions steal from taxpayers through the tax relief they got on their contributions?

This is the equivalent of saying that insurance is pointless since you never had to claim.

The majority of people wont be in this situation, however everyone will get old and retire and need money.

You miss my point - he lived a very frugal life -old car, never done work to his house, never went on holidays in order to save for his old age. The person who spent all their money and never saved was looked after just the same due to (unfair) fair deal scheme. He could have enjoyed his life more and the outcome in his old age would have been just the same - the state would have stepped into look after him.

Dont get me wrong - pensions are a great idea if you can afford it. But its pointless for alot of people on low incomes as it impacts their quality of living in the here and now. Nowadays you have to be able to contribute a large amount to a pension in order for it to give you a good payout in retirement - large contributions are out of reach for many nowadays.

A shite tonne of people have inheritance coming to them. Inheritance , a paid off mortgage and public pension is grand , I'd imagine that's most people's thinking.

Not very original but I always thought I'd sell up and move to Spain or Portugal when I retire to help stretch the budget and hopefully that means I can call it a day a few years earlier. I've heard others talk about Thailand, etc. but I don't think I'd go that far as I suppose the kids will be working in Europe so would be easier to still see them.

Correct, the 25k is subject to tax, but.....

People over 66 don't pay PRSI.

People over 70 often have medical cards, and so pay lower rates of USC.

As an example, my retired parents on 48-49k gross combined incomes, pay 8%-9%-10% direct income taxes, and get:

35 pm off elec bill

free TV licence

free travel pass

two full medical cards

Carry on, but don't be giving out if your time comes to need a nursing home, when the state hoovers up 80% of your income and 30% of your property value etc., or whatever applies then. All quite legal of course! I'm not complaining about this, just observing the reality that you may build up whatever nest eggs and so on, but Revenue ultimately has it's eyes on them!