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Child Item

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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KomradeBishop

FURET wrote: »

Not worried about that at all. It's happened before (1929, 2000, 2008) and it will happen again. The thing is, investments are not just numbers on a screen. When you own stocks, you own something as real as the ground you're standing on.

Take Coca-Cola. The share price of Coca-Cola fell around 50% in 2008/2009. But did Coke as a business lose 50% of its customers and profits during that six-month period? No. Investors need to be prepared to see periodic falls of 50%. If you can't handle it, you deserve to lose. Prudent long-term investors don't fear and fret when the market tanks. Instead, they recognize it for the wonderful buying opportunity that it is. A 50% stock market crash should really be thought of as a 50% sale and an excuse to load up on cheap stocks.

We often hear of billionaires (Buffett, Gates) who have doubled their wealth in the past five years. Sure they did - because they are predominantly invested in stocks, and global stocks have more than doubled in the past five years. Filipino stocks are up 500% since 2009 lows. US stocks are up 230%. And anyone can buy stocks and see their money double (or halve!). As you get older, you reduce your stock holdings and increase your bond holdings, so you will not experience the 2008-like volatility that all young investors should cheer, not fear.

Ya the reason stocks are boosting astronomically, is down to QE mostly - massive massive subsidy to the wealthy, effectively, through printing money and it being used to massively boost asset prices.

The way to make money in the banking/financial industry, is through volatility (read: unsustainable booms and destruction in the real economy, for profitable opportunities in financial markets) - if you have enough money to invest (usually requiring a rather high income), there's no way to lose (but plenty of ways for the rest of society to), so long as you're smart.

We really need a significant downsizing of the financial sector, due to the destruction and instability it leads to, in the real economy, and how politics becomes partly captured by this industry.

So yea, bringing a significant set of taxes onto the unearned income that plays a big part in the financial industry, would be a pretty nice way of boosting state pensions.

enfant terrible

Drumpot wrote: »

That said, what I find extremely fascinating (in an annoying way) is how banks are the least trusted institutions in this industry and yet People do Pensions, Life Assurance and use other services with banks who are normally not the most cost efficient or the superior option.

What is the most cost efficient way to get Life Assurance?

Sh1tbag OToole

enfant terrible wrote: »

What is the most cost efficient way to get Life Assurance?

To die the day after you get your policy?

Greentopia

Barely There wrote: »

But you want to increase spending on all of them, including the 80% that are doing quite all right.

The Old Age Pension, much like Child Benefit is a blunt tool.
It's not designed to eradicate poverty among certain sectors of society, it's used by Governments to buy votes.

The irony is that by increasing blanket spending on state pensions, Government have actually much less money left over for targeted spending on those who need it.

Still, no point think about these things too much eh? - it's all a bit more complex. Better just to whinge about the state pension and out-emote everyone else about how much you really, really care about the oldies.

Old age pension should be sufficient for people not to have to choose between food or paying a bill. It should guarantee a minimum standard of living for all after a life time of working and service to the country. That's not "whinging' that's stating what should be fair and right.

Yes I agree it's a blunt tool and a cynical vote way of buying votes but in lieu of a change in the system in how state pensions are managed a universal payment is what is available.

And taxes can be raised elsewhere (such as examples I've given) for targeted spending on those who need it and money could be saved from cutting waste and getting rid of super quangos that have swallowed hundreds of millions of euro in public money. It's not a zero sum game.

Private pensions are often far too expensive for many people on lower incomes-the working poor- to buy into in this country and the return is often not good.

I've paid into a union pension fund for 8 years when I lived in Sweden where it is affordable for all who work and comes out of one's union contribution and if you don't have that you would be eligible for a guaranteed state pension.
Whatever happens you won't have to choose between heating your home and eating.

Who on low incomes in the private sector can afford to pay a chunk of their wages into a pension pot? not anyone I know. That's why so many have to live off the state pension alone. Make it affordable and more would pay in I'm sure.

Oh and of course we once upon a time had such a thing as a pension reserve fund before it was plundered to pay bond holders...

Barely There

Greentopia wrote: »

money could be saved from cutting waste and getting rid of super quangos that have swallowed hundreds of millions of euro in public money.

Wow!

Now there's a detailed, costed and highly original proposal that I haven't heard before from every political party ever since time immemorial.

You've convinced me.

I'm in.

johnny osbourne

i've a 1/2 ton of aluminium buried somewhere

TheLastMohican

Ronnie Worried Workaholic wrote: »

What a load of twaddle and how dare you! So once I'm 65 I'm expected to live on 12k a year? Old age is not oblivion you know. I enjoy travelling, having a new car every few years, being able to afford to replace the ailing pc with a new surface pro, buy decent clothes...and generally live to enjoy life. That that bothers you says more about you than me.
I am far from parsimonious, I can assure you, and how you can suspect so is beyond me. I worked hard, raised and educated a great family and knew what the important things in life were. It isn't a matter of being overpaid with a lot to invest; it's investing a little and often and taking a long term view.
So drop that chip and stop the begrudery.

As I said ......... a bit on the tight side. How do you know what the important things (to the next generation are). You give out so much advice on this thread ....... I wonder, did your kids develop as individuals or as chips of the auld Scrameen?

And as for the "How dare you"? Give me a break Pilgrim.

Before you press the red flag, let me explain MY thinking. You bring up a family to the standards that you deem acceptable. Being a strict disciplinarian does not a well balanced child make. Your children work out this for themselves as they see the world through their eyes. And as their visits grow fewer and fewer ......... you get more time to spend on the internet.

As to the chip on the shoulder and begrudgery (incidentally spelled right), just sit back and think!

TheLastMohican

Scrameen, ........ I now understand you a little more:

"You are old, Father William," the young man said,
"And your hair has become very white;
And yet you incessantly stand on your head—
Do you think, at your age, it is right?"

"In my youth," Father William replied to his son,
"I feared it might injure the brain;
But now that I'm perfectly sure I have none,
Why, I do it again and again."

"You are old," said the youth, "As I mentioned before,
And have grown most uncommonly fat;
Yet you turned a back-somersault in at the door—
Pray, what is the reason of that?"

"In my youth," said the sage, as he shook his grey locks,
"I kept all my limbs very supple
By the use of this ointment—one shilling the box—
Allow me to sell you a couple?"

"You are old," said the youth, "And your jaws are too weak
For anything tougher than suet;
Yet you finished the goose, with the bones and the beak—
Pray, how did you manage to do it?"

"In my youth," said his father, "I took to the law,
And argued each case with my wife;
And the muscular strength which it gave to my jaw,
Has lasted the rest of my life."

"You are old," said the youth, "one would hardly suppose
That your eye was as steady as ever;
Yet you balanced an eel on the end of your nose—
What made you so awfully clever?"

"I have answered three questions, and that is enough,"
Said his father; "don't give yourself airs!
Do you think I can listen all day to such stuff?
Be off, or I'll kick you down stairs!"

TheLastMohican

Menas wrote: »

What? We should all forget about planning for our pensions and be happy with living hand to mouth on a state pension when we get old?
No holidays or travel.
No money for repairs to our homes.
No car.
No money to help our family in a crisis?

Nah...thanks for the advice, but I prefer a more comfortable existence!

Hand to mouth on a State pension?
How much does a couple need to live on. Am not talking about extras ......... just how much to eat, pay for energy, car, and a few essentials. I'm an old codger myself and I realise that the older you get ...... the less you spend.

If this seems wrong or misguided please explain.

animaal

Barely There wrote: »

The Old Age Pension, much like Child Benefit is a blunt tool.
It's not designed to eradicate poverty among certain sectors of society, it's used by Governments to buy votes.

The irony is that by increasing blanket spending on state pensions, Government have actually much less money left over for targeted spending on those who need it.

The old age pension really isn't a blunt tool. In fact, there are two entirely separate state pensions schemes;

1. The contributory state pension. This is a scheme that people pay into for all their working lives. When they retire, the benefit they receive depends on their payment record into the scheme.

2. The non-contributory pension. A payment for those who don't have an income, from the contributory pension or elsewhere. This is means-tested, so not blunt at all.

Governments tend to take the income from the contributory pension and spend it immediately, rather than put it aside for those who are contributing. That's a fault with our governments that treat it as a pyramid scheme, not a fault with the principle of having contributory pensions.

Helping to confuse matters further is the fact that both pension schemes provide similar maximum payments, and so it's understandable that people don't differentiate between them. In other countries, the more you contribute to the scheme, the higher your benefits when you retire - like how you'd expect a pension scheme to work.

Menas

TheLastMohican wrote: »

Hand to mouth on a State pension?
How much does a couple need to live on. Am not talking about extras ......... just how much to eat, pay for energy, car, and a few essentials. I'm an old codger myself and I realise that the older you get ...... the less you spend.

If this seems wrong or misguided please explain.

I was not referring to now. 230 or whatever it is a week seems ok to me.
But in the future when the realitive value of the state pension will likely be much less as the state stops been able to afford to pay out a decent state pension.

draiochtanois

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ytpe2r5bxkn0c1

TheLastMohican wrote: »

As I said ......... a bit on the tight side. How do you know what the important things (to the next generation are). You give out so much advice on this thread ....... I wonder, did your kids develop as individuals or as chips of the auld Scrameen?

And as for the "How dare you"? Give me a break Pilgrim.

Before you press the red flag, let me explain MY thinking. You bring up a family to the standards that you deem acceptable. Being a strict disciplinarian does not a well balanced child make. Your children work out this for themselves as they see the world through their eyes. And as their visits grow fewer and fewer ......... you get more time to spend on the internet.

As to the chip on the shoulder and begrudgery (incidentally spelled right), just sit back and think!

Again, how dare you. Sanctimonious rubbish! You have absolutely no idea what you are talking about . Visits fewer and fewer??? What are you on about? Our home buzzes with our children and grandchildren. We laugh and we share our way through life in a very loving and well balanced way. Who on earth even alluded to a strict disciplinarian? Oh how wrong you are! You have some cheek to suppose otherwise. I'd love to know how such a personal attack on me has anything to do with a discussion on pension plans. And how your sick blackened imaginings have any basis in fact, or any relevance to the discussion.

FURET

Ronnie Worried Workaholic wrote: »

Again, how dare you. Sanctimonious rubbish! You have absolutely no idea what you are talking about . Visits fewer and fewer??? What are you on about? Our home buzzes with our children and grandchildren. We laugh and we share our way through life in a very loving and well balanced way. Who on earth even alluded to a strict disciplinarian? Oh how wrong you are! You have some cheek to suppose otherwise. I'd love to know how such a personal attack on me has anything to do with a discussion on pension plans. And how your sick blackened imaginings have any basis in fact, or any relevance to the discussion.

Don't rise to the bait, Ronnie Worried Workaholic. So much anger, ignorance and naïveté on this thread. I've learned a lesson over the past year: if you're financially well off due to frugality and planning your life, it's best to keep it to yourself. I'm finished with this thread and all finance-related threads on this site. The lack of knowledge and sense from so many posters is exhausting.

One More Toy

Ooooohhhh mo dreolin

Drumpot

ancapailldorcha wrote: »

I'll leave this 'til I leave but thanks for the advice. It turns out it's a pretty decent plan (from what little I know).

Remember as well its not always right to merge all Pensions. Leaving aside the fact that you might lose out benefits (PRB/OPS to PRSA), sometimes having a few Pensions can work in your favour when it comes to fund choice and options at retirement.

Lets say you have €100,000 in all your pensions at retirement and you want to get your hands on some (not all of it). If you have 2 different Pension plans of €50,000, you can drawdown one of the Pensions and leave the other until a future date. If you only have one Pension pot of €100,000, you have to draw down your entire Pension in one go.

Drumpot

enfant terrible wrote: »

What is the most cost efficient way to get Life Assurance?

To get the most appropriate cover for what you need and to get the cheapest price in the marketplace.

Many times have I seen people with inappropriate cover for their mortgage (term or even whole of life). I am yet to see a person get the most competitive rate available when they come to me for a review.

Currently, brokers can get up to `15% reduction in the best life cover rates in some cases that banks most likely do not offer and clients cannot avail directly through life companies.

Drumpot

professore wrote: »

You never mention that they tax you when you draw down the pension, and who knows what the tax will be in 30 years time.

I'm sure people will excuse me for not cramming every aspect of a Pension into one post!

You get a tax free lump sum (that can sometimes be the entire Pension fund) and the balance will usually be drawn down in some form as taxable income.

Who is to say that in 30 years time people wont pay less tax? People don't decline buying a house because they are worried about the charges they might have to pay in 30 years. People do it for stability and personal reasons. A pension is taken out as a provision for your retirement. Of course rules may change that may improve or reduce the value of a Pension, but this shouldn't be a major factor in deciding whether or not to set one up.

Usually a person retiring who was on the higher rate of tax, will be taxed on the lower rate of tax if their income reduces.

draiochtanois

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anncoates

Have had one since my late 20s. Stopped paying into it for a few years during one particular job but started again when I got a job with company pension.

ytpe2r5bxkn0c1

draiochtanois wrote: »

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A certain amount of what you say is correct. It makes more sense to put surplus income to reducing debt as opposed to a pension plan. If you are young then pay off debt while keeping a small pension fund ticking over. Just keep an eye on the clock as the years can catch up on us at times.

Drumpot

draiochtanois wrote: »

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Water tax and property tax weren't a bill to be paid when I purchased my mortgage but I wouldn't let this or other future taxes stop me from buying a house.

Also Interest rates are historically low and will increase but I don't imagine many people will let that put them off buying a house.

People can only make financial decisions on what they could realistically expect. If you don't take out a Pension because you are concerned the government will dip into them in the future, then fair enough. Why bother saving money at all so ? They increased DIRT tax on deposits and deposit rates are next to zero.

A Pension is no different to any other savings/investment in that the rules that apply when you take out the investment/saving/Pension may change that could cost you money. The difference at the moment is that you know you will get circa 20% relief on pension contributions.

EazyD

My fathers pension was shot to bits after 3 decades of saving so understandably puts me right off.

Barely There

draiochtanois wrote: »

This post has been deleted.

A dangerous precedent was set by Govt. which has undermined people's confidence in establishing pensions. Ironic considering it is in Govt's interests to encourage (and perhaps even force) people to take out their own pensions.

Not enough opposition was made to this at the time. A combination I feel, of people not understanding what was going on and the fact that the people they raided are all working hard and too busy to protest like the bunch of scroungers who block O'Connell Bridge over a €160 water-charge.:rolleyes:
But I digress.

In terms of debt-paydown vs pension provision. It really depends on the interest rate you're paying.
if you're on a tracker mortgage, it's the cheapest money you'll ever get and there's no point paying this off quickly - you should see far higher returns on pension investment funds.

draiochtanois

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the evasion_kid

draiochtanois wrote: »

I disagree, up to this financial crisis pension pots were sacrosanct.
Precedent has been set, governments will dip into your pension pot while you are still building it up. For anyone with mortgage or other debt serious thought has to be given to paying that down rather than building up a pension pot that will get raided at the whim of government.

Argentina did it in 2008,as did Bolivia and Hungary in 2010,Bulgaria did their own scaled down version in 2011...seems to be the in thing.

Drumpot

EazyD wrote: »

My fathers pension was shot to bits after 3 decades of saving so understandably puts me right off.

That's perfectly understandable and a pension isn't for everybody but at least try and find a cost effective alternative strategy to plan for retirement.

Many people lost a lot on their Pensions because they simply were not in the correct fund strategy. This is why its extremely important for people to review their pension regularly.

Heres an example of where it just makes total sense to save into a Pension:

Person/director works in a company for over 20 years and is in an OPS. At their normal retirement age they will be entitled to 1.5 times their final salary. So for example, if their salary is €50,000 they will be entitled to €75,000 tax free lump sum.

Lets say they have put in €75,000 into their Pension pot and its made similar net gains to deposits (lets say zero for sake of discussion). If they were on the lower rate of tax it would of cost them roughly €60,000 to have €75,000 in their pension. They can take €75,000 tax free.

To save the same in a deposit account would cost that person €75,000 to have €75,000.

Now , I know deposit rates will not remain zero for 20 years and I know few pensions, if any will have a zero gain/loss. But there are strategies you can take in pensions to reduce your exposure to high risk funds that also help you make conservative returns that make the charges (and levys from government) negligible in the overall scheme of things.

Yes , the government pretty much raided peoples pensions which was just criminal. However, I don't believe the impact was to the degree that people should be completely putoff taking a Pension.

Like any investment decision a Pension may not work out the way you planned. Since you seldom have guaranteed fund options, you have to take a risk with your investment. But if you remain involved in the Pension process and take steps at different stages of your pension , it can be an extremely worthwhile experience.

I can tell you for nothing, clients of mine who have pensions at retirement are generally happier then clients of mine who don't when they are reviewing when they can retire. In fact, most people at retirement who have a Pension ae sorry they didn't save more into it! Many people who felt like you in their 30s/40s are sorry in their 50s that they didn't start saving sooner.

We always hear about the people who were unhappy with their Pension at retirement, you don't hear about the people who are happy because they are too busy enjoying their retirement. I am not saying that a Pension is a perfect product, but its not all doom and gloom either.

0gac3yjefb5sv7

Not currently but planning to in a couple of years.

Thargor

Is there any decent pension plan for when your company doesn't match contributions? Im on a good wage, saving 50-60% of my income but just dumping it in Prize Bonds at the minute because theres feck all else to do with it. Dont trust the markets at the minute and not interested in a house as Im not sure Im staying in Ireland.

draiochtanois

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