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Auto enrollment pensions

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Comments

  • #182
    Red Silurian
    Registered Users, Registered Users 2 Posts: 13,976 ✭✭✭✭Red Silurian


    https://www.boards.ie/discussion/comment/123999019#Comment_123999019

    Yes, that's exactly what I'm saying. The govt will contribute 0.5% so presumably that's instead of the tax relief element



  • #183
    plodder
    Registered Users, Registered Users 2, Paid Member Posts: 8,467 ✭✭✭plodder


    https://www.boards.ie/discussion/comment/124005676#Comment_124005676

    Yes, they can give it the two fingers. But, the point was these companies are pressuring employees to sign up, with false claims that they have to. AE would definitely be better for them.

    “The opposite of 'good' is 'good intentions'”



  • #184
    Hotblack Desiato
    Registered Users, Registered Users 2, Paid Member Posts: 40,025 ✭✭✭✭Hotblack Desiato


    https://www.boards.ie/discussion/comment/123992217#Comment_123992217

    The way it'll probably eventually go is a basic payment based on PRSI contributions, and then a means-tested top up

    I'm partial to your abracadabra
    I'm raptured by the joy of it all



  • #185
    Montage of Feck
    Registered Users, Registered Users 2 Posts: 4,183 ✭✭✭Montage of Feck


    How about the government treat PAYE payers like adults and let use invest in whatever we want with our money without punitive taxation.

    🙈🙉🙊



  • #186
    hold my beer
    Registered Users, Registered Users 2, Paid Member Posts: 2,999 ✭✭✭hold my beer


    https://www.boards.ie/discussion/comment/124005843#Comment_124005843

    what are you talking about punitive taxation?



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  • #187
    Montage of Feck
    Registered Users, Registered Users 2 Posts: 4,183 ✭✭✭Montage of Feck


    https://www.boards.ie/discussion/comment/124005852#Comment_124005852

    Just the awkward tax situation if you want to stick your spare cash into an etf rather than locking it away in a pension scheme.

    🙈🙉🙊



  • #188
    Hotblack Desiato
    Registered Users, Registered Users 2, Paid Member Posts: 40,025 ✭✭✭✭Hotblack Desiato


    https://www.boards.ie/discussion/comment/124005843#Comment_124005843

    You can opt out of auto-enrollment and make your own arrangements.

    But a lot of people never think about retirement until it's too late.

    The whole point of a pension scheme is that it's "locked away" until retirement and can't be dipped into to get you a new car or whatever. The quid pro quo is the tax relief. If the scheme allows you to withdraw funds, there's a clawback of the relief

    I'm partial to your abracadabra
    I'm raptured by the joy of it all



  • #189
    AndrewJRenko
    Registered Users, Registered Users 2 Posts: 33,601 ✭✭✭✭AndrewJRenko


    https://www.boards.ie/discussion/comment/124005843#Comment_124005843

    So we should eliminate the 40% tax break on pension investments for higher rate taxpayers presumably?



  • #190
    hold my beer
    Registered Users, Registered Users 2, Paid Member Posts: 2,999 ✭✭✭hold my beer


    https://www.boards.ie/discussion/comment/124005877#Comment_124005877

    you can invest in whatever you want to. Unfortunately the majority of employees don't invest anything in their future.



  • #191
    Montage of Feck
    Registered Users, Registered Users 2 Posts: 4,183 ✭✭✭Montage of Feck


    I'm thinking of signing up for the Waylon Jennings pension plan! But seriously currently conflicted as to wether contributing more to a PRSA or holding out for AE is the best option. Employer is adding a very meager annual top up to PRSA.

    🙈🙉🙊



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  • #192
    Hotblack Desiato
    Registered Users, Registered Users 2, Paid Member Posts: 40,025 ✭✭✭✭Hotblack Desiato


    You should probably be paying for the opinion of a qualified financial advisor rather than randos on the internet 😀 it should pay for itself many many times over.

    I'm partial to your abracadabra
    I'm raptured by the joy of it all



  • #193
    Montage of Feck
    Registered Users, Registered Users 2 Posts: 4,183 ✭✭✭Montage of Feck


    AE seem like the better option as employer will be contributing a larger amount but will have to wait until whatever the future retirement age will be, while PRSA allows a tax free lump withdrawal at 60.

    🙈🙉🙊



  • #194
    Dodge
    Registered Users, Registered Users 2 Posts: 11,045 ✭✭✭✭Dodge


    you can’t post “I wish the government would allow us to do whatever we wanted” and then worry about what to do! Ha



  • #195
    Red Silurian
    Registered Users, Registered Users 2 Posts: 13,976 ✭✭✭✭Red Silurian


    https://www.boards.ie/discussion/comment/124005809#Comment_124005809

    Yeah that doesn't surprise me, companies will try anything in fairness. The hard shoulder yesterday had "small employers" texting in complaining about the added cost, not realising that it will help with inflation in the short term and give more money to the retired in the long term. Plus on a minimum wage employee their contribution is just €400 a year

    The way I see it even a 1% employer contribution is better than AE in a lot of cases, bearing in mind there's a lot of employers who up until now have contributed nothing



  • #196
    Francie Barrett
    Registered Users, Registered Users 2 Posts: 17,349 ✭✭✭✭Francie Barrett


    https://www.boards.ie/discussion/comment/124005843#Comment_124005843

    There are many countries in Europe that have savings accounts where you can accumulate a limited amount of money tax-free (like the ISA in the UK). There's been talks of introducing something similar here for years, but under our centre-left government, it's just never going to happen.



  • #197
    Red Silurian
    Registered Users, Registered Users 2 Posts: 13,976 ✭✭✭✭Red Silurian


    https://www.boards.ie/discussion/comment/124006405#Comment_124006405

    Centre-left is a bit of a stretch. Considering their pro-business approach centre-right is probably more applicable. In any case those funds are more or less what we have with our PRSA



  • #198
    Hotblack Desiato
    Registered Users, Registered Users 2, Paid Member Posts: 40,025 ✭✭✭✭Hotblack Desiato


    Remember all the hullabaloo about SSIAs? Big deal, all it amounted to was standard-rate tax relief on a limited amount of savings, but we treated it as if it was winning the lotto

    Lots of countries allow tax relief on small savings, and not time limited like ours was either. Encouraging people to save is a good idea. But in this country you get nailed to the wall between crap interest rates and DIRT.

    I'm partial to your abracadabra
    I'm raptured by the joy of it all



  • #199
    Jim2007
    Moderators, Business & Finance Moderators Posts: 11,096 Mod ✭✭✭✭Jim2007


    https://www.boards.ie/discussion/comment/124005843#Comment_124005843

    Because you are not very go at it and the rest of the country would have to share in your misfortunes through social assistance through your retirement.

    The average American hit's retirement with about 50K net in retirement funds throught the wonders of the IRA, while the average Swiss comes in with about 500k as a result of being supervised by the government.

    Sometimes it is not about you, it's about society and a shared responsibility. The whole reason we are, like the rest of the EU, moving to the three pillar system is to ensure people don't become a drain on society.



  • #200
    Montage of Feck
    Registered Users, Registered Users 2 Posts: 4,183 ✭✭✭Montage of Feck


    https://www.boards.ie/discussion/comment/124008696#Comment_124008696

    Can't argue with that alright. Maybe a shorter term vehicle for people saving for a home or self improvement than going all out consumer investment free for all.

    🙈🙉🙊



  • #201
    plodder
    Registered Users, Registered Users 2, Paid Member Posts: 8,467 ✭✭✭plodder


    https://www.boards.ie/discussion/comment/124008696#Comment_124008696

    Do you have any references for those figures? The figure for the US looks very low and some of these comparisons might not be equivalent, if all assets (like housing) are included.

    “The opposite of 'good' is 'good intentions'”



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  • #202
    Jim2007
    Moderators, Business & Finance Moderators Posts: 11,096 Mod ✭✭✭✭Jim2007


    https://www.boards.ie/discussion/comment/124011270#Comment_124011270

    Forty years working in both markets and the studies I have are proprietary The US figures are very low for several reason:

    • The middle classes are living pay cheque to pay cheque, while at the same time racking up mountains of credit card debt.
    • While most US companies have a pension scheme, it is flawed in that pensions are paid out of current profits, not a fund and most employees are not covered by the pension in any case do to the high bar of entry - 60 hour weeks are not unusual as an entry point.
    • Pension saving are returned to employees on exit rather than a direct fund to fund transfer, resulting in the money being spend rather than transferred to the new employers fund.

    We took over one of the well know US private banks about two decades ago, when we got proper access, we discovered that the bank's art collection was worth more than that the client accounts! The US is the land of economic make believe, nothing is ever what it seems.



  • #203
    plodder
    Registered Users, Registered Users 2, Paid Member Posts: 8,467 ✭✭✭plodder


    https://www.boards.ie/discussion/comment/124012228#Comment_124012228

    The page below puts it at over $600K (for the 65 - 74 age group)

    https://www.edwardjones.com/us-en/market-news-insights/investor-education/investment-age/average-retirement-savings-age

    The page below suggests that 40% of American retirees rely totally on the federal social security pension.

    https://www.nirsonline.org/articles/new-report-40-of-older-americans-rely-solely-on-social-security-for-retirement-income/

    Though the social security pension in the US is a lot more generous than I had thought. It looks to be a lot higher than the Irish state pension. Up to $4,000 per month. Average around $2,000

    Post edited by plodder on

    “The opposite of 'good' is 'good intentions'”



  • #204
    Hotblack Desiato
    Registered Users, Registered Users 2, Paid Member Posts: 40,025 ✭✭✭✭Hotblack Desiato


    https://www.boards.ie/discussion/comment/124011270#Comment_124011270

    You can't count owning a home (that you live in) as a retirement asset.

    Yes, you could sell it, but then you have to buy another, or rent another.

    I'm partial to your abracadabra
    I'm raptured by the joy of it all



  • #205
    Podge_irl
    Moderators, Sports Moderators, Paid Member Posts: 31,754 Mod ✭✭✭✭Podge_irl


    https://www.boards.ie/discussion/comment/124012228#Comment_124012228

    The middle classes are living pay cheque to pay cheque

    They are not, they just claim they are. Frequently because they have high spending and are putting money away in savings and dislike how little disposable income they have after those things.

    https://www.boards.ie/discussion/comment/124012801#Comment_124012801

    I mean, you can count it if we were encouraging pensioners to downsize which we should be doing.



  • #206
    plodder
    Registered Users, Registered Users 2, Paid Member Posts: 8,467 ✭✭✭plodder


    https://www.boards.ie/discussion/comment/124012801#Comment_124012801

    I only mentioned it because some of the comparisons of retirement "wealth" were including property and some weren't. So, you need to be clear what is and isn't included (when comparing countries)

    I have to confess, I'm bowled over by just learning that social security in the US pays all retirees around 40% of their pre-retirement income (on a similar averaged basis as the new public sector pension here). Whereas here, you pay PRSI for 40 years, and get the same miserable payment as someone who sat scratching their hole for 40 years.

    “The opposite of 'good' is 'good intentions'”



  • #207
    AndrewJRenko
    Registered Users, Registered Users 2 Posts: 33,601 ✭✭✭✭AndrewJRenko


    Comments from a pensions advisor offering a scheme as an alternative to auto-enrollment;

    "Your contributions [to the private scheme] are not capped at 1.5%. We do not know how you will be allowed to draw down the pot when you retire as the rules are not defined, and you are not allowed to do any more than 1.5%.  The investments are also very unclear currently. Even if you invest in a Pension Cash fund, the return is high."

    Is he a spoofer?



  • #208
    plodder
    Registered Users, Registered Users 2, Paid Member Posts: 8,467 ✭✭✭plodder


    https://www.boards.ie/discussion/comment/124012922#Comment_124012922

    That's pretty misleading. Can a qualified financial advisor offer biased advice like that? I doubt it.

    “The opposite of 'good' is 'good intentions'”



  • #209
    AndrewJRenko
    Registered Users, Registered Users 2 Posts: 33,601 ✭✭✭✭AndrewJRenko


    https://www.boards.ie/discussion/comment/124013060#Comment_124013060

    QFA amongst other letters after the name



  • #210
    littlefeet
    Registered Users, Registered Users 2 Posts: 615 ✭✭✭littlefeet


    A simple way of encouraging older people to sell properties that are more suited to family homes: any person over 67 living in a 2-bed or less property gets an exemption from paying property tax or some version of something similar.

    The primary objective of MFF is to foster a culture of planning for the future. If you talk to any New Zealander, the KiwiSaver is completely embedded in society.

    I know someone who was recently tidying up some papers from someone who had died, and they found their payslips. The person has been paying a third of their salary in AVC when in their 60s, so that they could have a reasonable pension, possibly because they had started a pension too late.



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  • #211
    blackbox
    Registered Users, Registered Users 2, Paid Member Posts: 5,438 ✭✭✭blackbox


    https://www.boards.ie/discussion/comment/124012801#Comment_124012801

    It's an asset from the point of view that you don't have to pay rent to someone.



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