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Do you have a pension?

One More Toy

Was sitting around at work talking about it, I was the only one of my colleagues to have one set up, and contributing the maximum, why is there such disregard in the Irish population towards private pensions? The state one wont provide the greatest of living standards yet people put it off, even into their forties:eek:

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johnny osbourne

i get stuff on tick at the local petrol station and off licence, what do i need a pension for?

Geuze

not yet wrote: »

I've a pension of half my salary per week and 1.5 my salary lump sum..

Now I don't contribute to this handsome pension, I think the indo call it a golden pension, sure I'll be livin it up in luxury on my pension...

Yep you guessed it I have the hens teeth of pensions: A public sector one so fcuk all you fools contributing week after week to your pension pot.

Please note that every public servant contributes towards their pension scheme.

Most (90%) of them pay 6.5% of wages, plus all of them also pay the PRD, which is up to 10% or 10.5% of wages.

Geuze

bluewolf wrote: »

state one is very small

I wouldn't call 230.30 pw "very small".

Geuze

Spanish Eyes wrote: »

Medical Card guaranteed, and many other benefits too.

The med card is not automatic for over 65s.

arctan

I paid into a pension for nearly 3 years, close to 4 grand, so 8 k in the pot with employer contributuions....

since left the company and was told unless I get it out it'll wittle away ...

can't transfer it to my current employers scheme because I'm out of the country

woulda prefered to have it to waste as I pleased

jester77

I've a guaranteed minimum payout which I keep in sync with my current salary. Employer also contributes 25% of what I put in. If the funds do well I could easily retire much earlier.

Sam Kade

Wasn't there some fella that paid 150k into a pension, when he reached pension age he was told all he could draw was 11k a year. He'll have to stay alive until he is 80 to get back what he paid in. They allow it against tax when you're paying in but they'll tax it well when you want to draw it. These private pensions aren't all they're cracked up to be.

Spanish Eyes

Geuze wrote: »

The med card is not automatic for over 65s.

It is, if your only income is the State Pension, which is what I said.

kazamo

Cee-Jay-Cee wrote: »

I'm in the public sector and so will have a state pension (boo hiss...yeah yeah what ever) I also have two 'with profits' savings funds which are doing extremely well and have been since I started them in 2000, they've averaged between 27 and 36% in bonuses since the start with everything earned to date including my premiums guaranteed on maturity. They'll give me a nice nest egg on retirement.

You assume the Ponzi scheme public sector pension will still be around when you retire. How can you be so certain ?

Hans Bricks

Public sector here on a contract so I pay prsi and some other obscure pension contribution. Quite small. About 100 or above a month. I'm not even entirely sure tbh.

What's this "employer matches my contribution " ? I'm in the same ignorant boat as melisandre21.

BrianD3

I have a public service one but I'm not relying on it and I don't plan on working 40 years in any case. As well as my pension contributions, I also save over 50% of my net salary and invest that conservatively how I wish. If I can keep that up I'll be very financially secure long before normal retirement age.

As for private pensions, I know people who took out AVCs, invested 6 figure sums in them over 15 years and when it was time to retire, the pot was worth the same in nominal terms as what they had invested in it i.e less than if the money had been put in a post office cert or a bank deposit account. :mad:

Who would enter into such an arrangement were it not for the tax relief. It's my opinion that the pension industry uses the tax relief to insulate itself from investor expectations/anger. "Ah the pot didn't grow over 15 years because we were useless and greedy - but think of the tax relief!"

As for my own saving, obviously not everyone can save like that - life choices, bad luck, children, big mortgages etc. can make saving either net salary or into a pension very difficult. However there are plenty of others that could save much better but don't because of a consumerist mindset, being financially clueless, spending money on drinking/weddings/bullsh*t and because "the taxpayer" can bail them out when they retire.

If everyone got a state pension based on how much (little) PRSI they contributed (if at all) over their lives there would be riots. And yet, the current generous contributory and non contributory old age pensions regularly get described in the useless media as "no pension".

Elessar

I'm currently paying in the maximum of 8% and my employer matches with 10%. Although I only started this year (29) and I'll probably change jobs soon so I'll loose the employer contributions

KERSPLAT!

I'm embarrassed to say I haven't a clue about pensions, employer contributions, etc.

My contract says they'll contribute a max of 5%.

So I pay in 5% of my salary and they match it, grand. what happens if I leave in a few years, I keep my contribution but what about the employer contributions?

Gonna email HR in the morning and see what the craic is

kazamo

Geuze wrote: »

I wouldn't call 230.30 pw "very small".

It is if it's the only income you have for the last 10-20 years of your life.

Would you be able to live of 12k a year and not be watching all expenditure very closely ?

Liquidus

Depends if you stay in Ireland for the foreseeable future,
Having lived in Japan for a few years now back home, and plan to transfer again somewhere in Europe then I don't think paying into a pension is advisable at the moment.

Tin Foil Hat

One More Toy wrote: »

Was sitting around at work talking about it, I was the only one of my colleagues to have one set up, and contributing the maximum, why is there such disregard in the Irish population towards private pensions? The state one wont provide the greatest of living standards yet people put it off, even into their forties:eek:

No. I have spent my twenties and thirties paying for my house. I'll be mortgage free before I am fifty. So, at least, I can ever be thrown into the street. It is something that is starting to worry me, though (i'm nearly forty).

RedXIV

I've a pension but only started paying properly into last year, would love to know where to find out more about them though. Any good resources out there?

I especially like the idea of managing my own funds at some stage

One More Toy

Tin Foil Hat wrote: »

No. I have spent my twenties and thirties paying for my house. I'll be mortgage free before I am fifty. So, at least, I can ever be thrown into the street. It is something that is starting to worry me, though (i'm nearly forty).

You dont need to be throwing a pile into it, I wont be maxing out my contributions forever; have a look at the pension authority .ie website

kazamo

I have a pension but haven't contributed to it in about four years.
Stopped it due to losing my job and with reduced earnings only now starting to consider recommencing contributions but very reluctant.

When I look at annuity rates, I see the paltry amount that 100,000 will buy.
Looked it up just now and using a UK website, leaving the pension drawdown until 75 (yep that late) and only a pension for myself, the 100k will give a pension of less than 8k per anum, meaning I would need to be alive until 88 to get my money back.

Second bit is the idiotic pension levy on private sector pensions which penalises anyone on a defined contribution scheme.
Worst part is that some of this money will be used to prop up defunct defined benefit schemes, so in effect I am paying for someone else's pension but can't avail of the same provision myself.
I know the government have stated it will end, but find raiding only some people's pension pots a very sinister development.

Got my pension statements today in the post which thankfully only shows the value of the fund and not statement of reasonable projection when I retire and what it will buy.
That comes in February each year and is a thoroughly depressing document.

Tin Foil Hat

One More Toy wrote: »

You dont need to be throwing a pile into it, I wont be maxing out my contributions forever; have a look at the pension authority .ie website

I'm kinda hoping one of my kids will make a fortune - and still like me.

kazamo

RedXIV wrote: »

I've a pension but only started paying properly into last year, would love to know where to find out more about them though. Any good resources out there?

I especially like the idea of managing my own funds at some stage

www.pensionsauthority.ie/en/Calculators/Pensions_Calculator/

Streetwalker

No thanks couldn't afford one. Every cent I have goes towards keeping the roof over my families head. I'll worry about pensions in my 50's

Zaph

KERSPLAT! wrote: »

I'm embarrassed to say I haven't a clue about pensions, employer contributions, etc.

My contract says they'll contribute a max of 5%.

So I pay in 5% of my salary and they match it, grand. what happens if I leave in a few years, I keep my contribution but what about the employer contributions?

Gonna email HR in the morning and see what the craic is

Where I work you automatically pay into the pension as soon as you're made permanent. If you leave within two years you're entitled to all your pension contributions back, but not the employer contributions. If you leave after two years both employee and employer contributions are frozen at the time you leave and you can't withdraw any of it. You have a choice of leaving the funds in the pension fund until you retire or moving them to the pension scheme of your new employer. As far as I know these are standard Pension Board rules and we don't do anything out of the ordinary.

I'm on the pension committee in work and it's disheartening to see how uninterested the younger staff are in their pensions, especially as we have a DC scheme and their investment choices now can have a huge impact on how their pension performs in the future.

Tin Foil Hat

Zaph wrote: »

Where I work you automatically pay into the pension as soon as you're made permanent. If you leave within two years you're entitled to all your pension contributions back, but not the employer contributions. If you leave after two years both employee and employer contributions are frozen at the time you leave and you can't withdraw any of it. You have a choice of leaving the funds in the pension fund until you retire or moving them to the pension scheme of your new employer. As far as I know these are standard Pension Board rules and we don't do anything out of the ordinary.

I'm on the pension committee in work and it's disheartening to see how uninterested the younger staff are in their pensions, especially as we have a DC scheme and their investment choices now can have a huge impact on how their pension performs in the future.

20 or 25 years ago an average worker could afford an average home. Things have changed. Rents and mortgages are really expensive. It's harsh to criticise people for not providing for their future when they can barely afford their present.

Zaph

Tin Foil Hat wrote: »

20 or 25 years ago an average worker could afford an average home. Things have changed. Rents and mortgages are really expensive. It's harsh to criticise people for not providing for their future when they can barely afford their present.

It's not a case of them not being able to afford it, it's an automatic deduction from our salaries that's matched by our employer so involvement in the pension scheme is not optional. But people have a degree of control over how those contributions are invested, and virtually no-body under the age of 35 even looks at the system to see what they could be doing with their funds. By making certain choices now, even with relatively small funds, they could greatly enhance the size of their fund in the future. There's a total lack of engagement which baffles me because as soon as I was made permanent and part of the scheme I made sure I knew what it was all about.

[Deleted User]

My mum started a private pension for me when I was 21, and I took over and increased the payments as soon as I left uni and began my working life. Even minimal payments from your early 20's greatly improve the financial landscape of your retirement.

Menas

There are a couple of old lads in my work who are on a defined benefit scheme. Private sector. Lucky gits.

FURET

BoJack Horseman wrote: »

anyone in their 20's or 30's who hasn't is boned.

the state pension is almost certainly going to be significantly lower if retiring around 2050 vs the rates enjoyed today
its 50% unfunded as it is & thats just going to get worse.

Yep. Here's how to calculate how much you might need:

FURET wrote:

Use moneychimp.com -> Calculator

You start off by entering the amount you want to live off annually - in today's money - if you retired right now.

Now you compound that amount by, say, 2.5% per annum for, say, 30 years in order to see what the amount would be worth in 30 years. Inflation could be higher, could be lower, but let's assume an average annual rate of 2.5% for the next 30 years.

So let's say you want to have 40,000 euros in today's money when you retire in 30 years' time:

So you'll need 83,902.70 euro during your first year of retirement 30 years from now.

The recommendation is that you should draw down no more than 4% of your total retirement pot each year for every year that you are retired. So, that 83,902.70 is 4% of your total retirement pot.

Therefore to retire on the future equivalent of 40,000 euro, you would need a total retirement pot of 2.097 million euros - and it would need to be invested in something giving you an average return of more than 6.5% per year during your retirement, so that you would never run out of money.

To attain a pot of that size, you would need to save 1,500 per month every month for the next 30 years and it would need to grow at least 7.7% on average per annum:

Historically, you can accomplish growth of this rate with a low cost broadly diversified portfolio of passive index funds.

That's how you do retirement planning calculations in a nutshell. And I didn't charge you an arm and a leg for it, did I?

I'd say a lot of people in their 30s and 40s have no idea how screwed they are.

Barely There

Yep.

My employer contributes 12% of my salary and given the tax-breaks on my own contribution it would be madness not to have one.

Certainly wouldn't want to be depending on the State to fund my retirement. The current levels of OAP are unsustainable as the population ages and life expectancy continues to rise. Anyone thinking they can live a comfortable life post-retirement on a OAP is living in cloud-cuckoo land and I won't be shedding any tears for these numbskulls when reality bites them in the arse a few decades from now.

I would see a pension as one valuable strand in a post-retirement plan. But one should certainly be developing other options too.

KERSPLAT!

FURET wrote: »

Yep. Here's how to calculate how much you might need:

I'd say a lot of people in their 30s and 40s have no idea how screwed they are.

I'm 28 and very worried.

I've only just started out in a new career and was only made permanent 2 weeks ago. Have emailed HR regarding setting up a pension this morning based on this thread.