Why are people obsessed with getting a pension

El Tarangu · 08-03-2019 1:39pm

Tacklebox wrote: »

I bought a big house with inheritance in 2002, off the plans, luckily its in a nice estate, detached 5 bedrooms and well insulated.

Ill sell it before I retire, buy something much smaller and have the rainy day money and leave the house to my son.

I know its a bit of a gamble but I think its a lot less of a risk than buying into a pension.

And if the property market goes bang again the year before you retire(?) Or interest rates increase significantly (it's not as if they drop much further), house prices drop accordingly, and you end up getting a lot less for it than you planned(?)

Of course there are risks involved with pensions as well, but the fact that they are invested in lots of different areas mitigates the risk a bit.

KyussB wrote: »

... The solution: Get better paying jobs, so you have money to save in the first place. Unionize, and improve your jobs and pay.

Then when you get that sorted, use the labour power built up from that, to force employers to offer Defined Benefit instead of the shity Defined Contribution pensions you get today...

Defined Benefit pensions come from an era where people had a lot more kids, so there were always lots of workers to support a small number of pensioners. They were also conceived when people drank and smoke a lot more, so in most cases pensions were only paid out for a few years before the recipient shuffled off to the Great Beyond.

Those days ain't coming back, so you can either rage against the system, or take responsibility for your own future.

08-03-2019 1:44pm

Feeling the need to start approaching a pension advisor, at 44 am I too late, have some contributions, wanted to move house first and then max out pension contributions to avail of tax relief as a cost efficient means of saving, moving isnt looking like happening now, what percent am I likely to be contributing??

Pussyhands · 08-03-2019 1:56pm

I'm late 20's and I'm kind of the same opinion as OP although I have a private pension.

I wouldn't mind it so bad if I could access my funds any time. Now I have to face the facts that 5% I get this month won't been seen for at least another 40 years.

Then they say "you need a pension to have the same standard of living as today".

I save about 15k a year for future housing, kids, holidays etc.

When I'm 70 I won't be thinking about saving in the future or kids costs.

My grandparents have all just got the state pension, often they were only housewives, farmers yet they're doing alright. How much money do you need when you're 70? 250 a week (todays money) is pretty good for a 70 year old considering you'll have your house and kids paid off.

And they overstate the tax relief side of it too. Sure, your pension can grow before the tax is taken but you still have to pay tax when you withdraw it, you have to pay fees yearly and on drawdown plus if you take a lumpsum a big chunk is taken in fees right away. If you take the weekly payment you're going to have to stay alive for a good long time to avail of a good chunk of your money.

Pussyhands · 08-03-2019 2:18pm

hmmm wrote: »

Wait till you get to 50, and things are creaking, and you're beginning to forget things, and younger people are getting promoted, and your job is beginning to be automated, and you wonder how you're going to keep working until you're well into your 60s.

It's too late then to start saving.

More than anything else, having savings gives you options. And a pension is a way to save tax-free until you need it.

You can't access the pension until you're retirement age (at least in the pension I'm in)

Pussyhands · 08-03-2019 2:26pm

Heres Johnny wrote: »

Basically if you are on 20k or so a year working then the drop in lifestyle when you just get the old age pension is not going to be huge and you probably can't afford to pay into a personal pension anyway.

If you are on 60k and enjoy spending it and don't put anything away the shock of dropping to 12k would be massive.

Remember this is yourself you're saving for, not a complete other person.

I'm retiring, or at least partially, at 60 the year my mortgage is due to finish. I've been in a pension fund since I'm 24 and it's worth a hell of a lot more than I've put in in those 14 years.

Never listen to someone that doesn't have one, they know they should be planning for the future and often don't want anyone else to either.

I'd be like that. I earn 45k but my lifestyle is probably the same as someone on 25k or similar. I'm saving loads for a mortage and I don't have lavish lifestyle.

I have a pension through work though. One thing though, I can't access it until I reach retirement age. I wish I could access it earlier if I wanted, I could retire earlier

Eric Cartman · 08-03-2019 2:33pm

PhilOssophy wrote: »

I want to live out my days lighting cigars with 50 euro notes and snorting coke on a yacht with a load of hookers around me, not unable to afford to turn on the heating......

no pension product in Ireland will ever pay for that. You'd be better off investing your money in businesses or other assets that make a propper return that tracks inflation. As much as I hate property as a 'pension scheme' atleast the rental income will always be in line with peoples earnings .

Could you imagine piling a million quid into a pension to wind up that thats what a used car costs in 30 years time.

Drumpot · 08-03-2019 3:01pm

Haven’t seen an answer to the question “how will you fund your retirement?”. Presuming you could very well be dead is not planning or a rational reason to not put aside provisions for your retirement. Most people seem to be able to find money for a night out or some other thing that they want now but there’s always an Excuse when it comes to putting aside savings that won’t be used for decades.

If you want to save for long term use or even invest in a rental property (you need a big pension pot for this) a pension is generally the cheapest and most cost effective method to do it, particularly if you are on the higher rate of tax. People get their knickers in a twist about fees and fund performances with little understanding of what they are talking about TBH. There is usually soap boxing on these forums with default righteous indignation towards pensions or investments with little insight into why there this is perception.

I was chatting with somebody who wants to retire as soon as they can and they were fortunate enough to be able to throw an extra 600e a month off their mortgage which would save them 30k interest and chop 5.5 years off their mortgage.. They are paying top tax so effectively 50% tax. I showed them the benefits of throwing 1200k a month into a pension (same net cost) for the same term and they would get a tax free lump sum to pay off their mortgage earlier and still have a couple of hundred thousand left over. It’s not guaranteed but it’s most definitely a more tax efficient way of them saving. Not just that , this person has a serious medical condition so if they die with their pension it all goes to their estate tax free. Even if the fund dropped 50% which is highly unlikely they would be no worse off then if they had saved it in a savings plan.

All investments are a risk. Putting money in a bank is a risk. When investing money you should make sure you understand the risk of your investment. Some of The questions you should always consider are:

- why am I investing my money?
- How much time have I got to invest my money ?
- how much would I be comfortable losing?

People should never presume it’s a straight line to retirement or maturity of their investment. Do you automatically presume a flight from A-B will not have turbulence? Even the best financial adviser/broker does not control the markets and does not have a crystal ball. We can only try and guide people along the way, like a pilot. You don’t bang down the pilots door when there is turbulence on a plane , you trust he will help you get from A to B. Some pilots are less reliable then others but most are good competent professionals. Its the same in the financial industry.

You only ever hear of the bad experiences people have with investments/pensions because most people have Positive or neutral experiences. If you don’t like your adviser/ sales person then use somebody else. Don’t use that as an excuse to avoid taking out a pension. And don’t let other people’s experience or prejudice have so much weight to your decision. Do your own research and validate/clarify your concerns.

witchgirl26 · 08-03-2019 3:27pm

Pussyhands wrote: »

I'm late 20's and I'm kind of the same opinion as OP although I have a private pension.
I wouldn't mind it so bad if I could access my funds any time. Now I have to face the facts that 5% I get this month won't been seen for at least another 40 years.

That's kinda the point - putting money aside for your future that you can't decide to use for a holiday or a house now. And you don't have to put in 5%. If you're in your 20's, you could opt for a slightly smaller % now and increase as you age.

Pussyhands wrote: »

Then they say "you need a pension to have the same standard of living as today".
I save about 15k a year for future housing, kids, holidays etc.
When I'm 70 I won't be thinking about saving in the future or kids costs.

I don't think they mean it in the sense of saving for housing or kids but rather that you can go on holidays, continue to live in your home and generally enjoy your retirement years rather than watching the pennies continuously.
I'd like to still be able to go on holidays when I'm retired. In fact I'd like to go on more considering I'll have more free time but that requires money to fund.

Pussyhands wrote: »

My grandparents have all just got the state pension, often they were only housewives, farmers yet they're doing alright. How much money do you need when you're 70? 250 a week (todays money) is pretty good for a 70 year old considering you'll have your house and kids paid off.

Yes but there's no guarantee that the state pension will be the same or even there in 40 years so you can't guarantee that you'll have the same. And great if they're doing well on it. My mam is in her 60's, retired and has the state pension, a small amount of her own and half my dad's (because he paid into a specific scheme). It's a good thing her house is paid off but it's not all easy going. Any works that are needed to be done to the house have to be really thought about a costed well. Buying a new car (new to her not new new) was a massive deal. Bills and general living still isn't cheap.

Pussyhands wrote: »

And they overstate the tax relief side of it too. Sure, your pension can grow before the tax is taken but you still have to pay tax when you withdraw it, you have to pay fees yearly and on drawdown plus if you take a lumpsum a big chunk is taken in fees right away. If you take the weekly payment you're going to have to stay alive for a good long time to avail of a good chunk of your money.

The tax incentive is sometimes a little overblown at the now rather than looking down the road, however if think about what age you retire at and how long you'll most likely be alive, then you'll get a fair chunk of that cash back. Essentially if you retire at 65 and live till your 81 (the WHO estimation of life expectancy in Ireland) that's 832 weekly payments. If you take the state pension being approx €250 a week and you wanted to match that with your private pension you'd need a pot of €208,000 to cover just that without taking into account tax. For 40 years that means saving €5,200 a year (again without the tax element) which isn't a lot. But then neither is €250 a week to live on.

Tacklebox wrote: »

I live in the moment, seen enough pensions go down the drain.
People who gamble on a high risk product, end up with one eight of what they invested in.
Trends change, but the pension sales person will pull the wool over your eyes with soundbites and fancy phrases...

I bought a big house with inheritance in 2002, off the plans, luckily its in a nice estate, detached 5 bedrooms and well insulated.

Ill sell it before I retire, buy something much smaller and have the rainy day money and leave the house to my son.

I know its a bit of a gamble but I think its a lot less of a risk than buying into a pension.

But what if the property market crashes? That's it all gone in one fell swoop. Yes people lost a huge amount on their pensions in the economic crash but you are allowed to change the risk profile of your pension if it's a private one normally. The idea being that you can go with a higher risk profile when you're younger to build the pot and then reduce the risk as you get closer to retirement age so that the chances of incurring large losses are lowered.
Especially now as the low risk aspects don't rely on construction or banking and have a more even spread across industries so as to try to protect about a large crash in one particular industry causing a massive problem.

Pussyhands · 08-03-2019 4:20pm

witchgirl26 wrote: »

That's kinda the point - putting money aside for your future that you can't decide to use for a holiday or a house now. And you don't have to put in 5%. If you're in your 20's, you could opt for a slightly smaller % now and increase as you age.

I don't think they mean it in the sense of saving for housing or kids but rather that you can go on holidays, continue to live in your home and generally enjoy your retirement years rather than watching the pennies continuously.
I'd like to still be able to go on holidays when I'm retired. In fact I'd like to go on more considering I'll have more free time but that requires money to fund.

If I had a free house today I could live off 250 a week for sure.

Even people on the dole who rent go on holidays.

I have yet to see a 70 year old who is as picky with quality/condition as young people. I can't see myself spending big money when I'm 70 on cars, holidays etc.

I don't even do that now!

In any case I have my private pension for now....I can always cancel it after 10 years I suppose.

PhilOssophy · 08-03-2019 4:22pm

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Pussyhands · 08-03-2019 4:32pm

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

Steer55 · 08-03-2019 4:33pm

Pussyhands wrote: »

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Why not, you will have more time to watch it.

witchgirl26 · 08-03-2019 4:35pm

Pussyhands wrote: »

If I had a free house today I could live off 250 a week for sure.
Even people on the dole who rent go on holidays.
I have yet to see a 70 year old who is as picky with quality/condition as young people. I can't see myself spending big money when I'm 70 on cars, holidays etc.
I don't even do that now!
In any case I have my private pension for now....I can always cancel it after 10 years I suppose.

Really? Coz I see my mam who has a little bit more than that and a "free" house and it's not that easy. You still have to pay gas, electricity, repairs, upkeep, house insurance etc. Not to mention any unexpected things that might crop up. And that's just on the house.
Cars cost money so there's fuel to consider. Plus car insurance, nct, tax and ensuring you have money in case the car breaks down.
My mam doesn't spend big money on cars or holidays but things cost. Her car cost less than €15k however that's a huge amount when you're a pensioner. She needed something automatic as she has arthritis in her hands so therefore finds changing gear continuously quite hard on them. She didn't go for some mad top of the range thing but she wasn't buying some banger that would end up costing her more.
Her biggest holiday since being retired has been to the UK but it still costs money. As does any hobbies etc.

Personally I want a nice quality of life when I'm retired so that's why I'm putting money into a pension. I don't want to just exist but to enjoy it.

lawred2 · 08-03-2019 4:38pm

Addle wrote: »

How do you/will you pay for a roof over your head?

me and you will pay for it

and his pension

sweet deals all round

....... · 08-03-2019 4:39pm

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

Thats 250 quid per week. Even in the depths of winter my gas bill is only about 250 bimonthly.

Youd also be getting the Household Benefits Package once you were over 70. And the GP card. And free travel. Why would you need to run a car?

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Eric Cartman · 08-03-2019 4:40pm

Pussyhands wrote: »

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

a lot of pensioners now are the last ones on super cushy defined benefit pensions. Theyre a lot more well off than our parents will be when they come to collect.

witchgirl26 · 08-03-2019 4:41pm

Pussyhands wrote: »

Heat is cheaper. I won't be having spotify or netflix when I'm 70.

Anyways, vast majority of pensioners nowadays don't have private pension and they seem to be doing grand.

Why would heat be cheaper? Do you mean the allowance? Do you know how much that is under the Household Benefits? €35 a month on either gas or electricity. That's it. Good luck heating your house for that.

And why wouldn't you be having them? You'll have more time to enjoy them.

You'll probably find a lot paid into pension pots actually. My dad paid into the "widows and orphans" fund as a teacher. My mam has a private pension (albeit very small) from being a nurse.

witchgirl26 · 08-03-2019 4:44pm

....... wrote: »

Thats 250 quid per week. Even in the depths of winter my gas bill is only about 250 bimonthly.

Youd also be getting the Household Benefits Package once you were over 70. And the GP card. And free travel. Why would you need to run a car?

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

....... · 08-03-2019 4:45pm

witchgirl26 wrote: »

Why would heat be cheaper? Do you mean the allowance? Do you know how much that is under the Household Benefits? €35 a month on either gas or electricity. That's it. Good luck heating your house for that.

Is that 35 euro per month winter AND summer?

Because while my gas bill is about 125 per month in the winter, its virtually nothing in the summer.

In my last property (an apartment) my heating bills were very low as I didnt lose much heat at all once it had been on for an hour - so if I went back there on retirement, 35 euro per month (if it was all year round) might cover the heating entirely for the year.

....... · 08-03-2019 4:49pm

witchgirl26 wrote: »

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

I have done this very thing up quite recently for my father in law and the conclusion we came to was that if he downsized into a place that cost much less to heat he could even keep his car running and itd be grand. There are a range of benefits available for people who have very low income. The biggest issue for him on a fixed income is when the government suddenly introduce new costs (like property tax).

Nursing homes are available thru Fair Deal without savings. Very few people could afford really nice nursing homes unless they were very wealthy. They are over 1k per week, most ordinary punters wont have that.

witchgirl26 · 08-03-2019 4:52pm

....... wrote: »

Is that 35 euro per month winter AND summer?

Because while my gas bill is about 125 per month in the winter, its virtually nothing in the summer.

In my last property (an apartment) my heating bills were very low as I didnt lose much heat at all once it had been on for an hour - so if I went back there on retirement, 35 euro per month (if it was all year round) might cover the heating entirely for the year.

Yes it's €35 a month. But that's just against either your gas or electricity. Not €35 against both.

While I agree it could cover a lot during the summer months, the winter last year cost a lot of people a lot in heating and electricity with the cold weather. And it depends on how energy efficient your boiler is.

PhilOssophy · 08-03-2019 4:52pm

The reason pensioners are doing grand is they were super savers years ago, not because they are minted on DB pensions. My parents are a cast-iron example of this, they saved like crazy to raise us and never wasted a cent. Once we were raised, they didn't change the habit and now are cushy as anything.
They still need to pay the bills though.....

witchgirl26 · 08-03-2019 4:54pm

....... wrote: »

I have done this very thing up quite recently for my father in law and the conclusion we came to was that if he downsized into a place that cost much less to heat he could even keep his car running and itd be grand. There are a range of benefits available for people who have very low income. The biggest issue for him on a fixed income is when the government suddenly introduce new costs (like property tax).

Nursing homes are available thru Fair Deal without savings. Very few people could afford really nice nursing homes unless they were very wealthy. They are over 1k per week, most ordinary punters wont have that.

That's assuming he's happy to move out of his home. A lot of people don't want to move if they're living in a community they know and are comfortable in.

Fair Deal can be great but don't forget, it takes into account all of your assets and savings and some people just don't qualify. I've seen it with elderly relatives of my mam's.

malinheader · 08-03-2019 4:56pm

PhilOssophy wrote: »

250 quid to heat your house, pay the bills, keep a car on the road, enjoy some sort of standard of living, you could live on it but I can assure you, it'd be absolutely a poxy way to live out the end of your life!

After paying their mortgage some young couples will have less than this to manage on.

....... · 08-03-2019 4:57pm

witchgirl26 wrote: »

Yes it's €35 a month. But that's just against either your gas or electricity. Not €35 against both.

While I agree it could cover a lot during the summer months, the winter last year cost a lot of people a lot in heating and electricity with the cold weather. And it depends on how energy efficient your boiler is.

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

witchgirl26 · 08-03-2019 5:00pm

....... wrote: »

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

That's a lot of compromises to have a "reasonable existence" though. Sharing with a stranger in a home you're not familiar with that is smaller just to get by? Nah I think I'll stick with my private pension.

Plus no guarantee there will be a state pension in the future or it's level. That's the problem.

08-03-2019 5:00pm

witchgirl26 wrote: »

Yes but then what about your electricity bill too? And all the other expenses? Household benefits is €35 a month. In total. Not a huge amount to help with those winter bills. Free travel - brilliant. Unless you want to go somewhere that isn't on a route. Or live in the country.

Right do up a budget there of everything you currently spend on household expenses, excluding mortgage and commuting to work costs. See how much that comes to. And don't forget some savings held aside in case you need a nursing home too.

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

....... · 08-03-2019 5:33pm

witchgirl26 wrote: »

That's a lot of compromises to have a "reasonable existence" though. Sharing with a stranger in a home you're not familiar with that is smaller just to get by? Nah I think I'll stick with my private pension.

Plus no guarantee there will be a state pension in the future or it's level. That's the problem.

I was actually thinking of sharing with one of my existing friends who was also in the same boat, I often plan it with my bestie, she reckons we can live together in a smaller house, drink cheap booze from LIDL and watch old movies on Netflix all day long and take up smoking again in our 80s

argolis · 08-03-2019 5:33pm

OP even if you could realistically get by on just the state pension, it only starts paying out at the age of 67 or whatever it is now.

Why not save money in a pension and retire earlier, like 60, or even 55 if you were lucky?

It mightn't sound like much, but if you could finish up even one year early at the end of your career, would you not want to?

Heres Johnny · 08-03-2019 5:48pm

Pussyhands wrote: »

Heres Johnny wrote: »

Basically if you are on 20k or so a year working then the drop in lifestyle when you just get the old age pension is not going to be huge and you probably can't afford to pay into a personal pension anyway.

If you are on 60k and enjoy spending it and don't put anything away the shock of dropping to 12k would be massive.

Remember this is yourself you're saving for, not a complete other person.

I'm retiring, or at least partially, at 60 the year my mortgage is due to finish. I've been in a pension fund since I'm 24 and it's worth a hell of a lot more than I've put in in those 14 years.

Never listen to someone that doesn't have one, they know they should be planning for the future and often don't want anyone else to either.

I'd be like that. I earn 45k but my lifestyle is probably the same as someone on 25k or similar. I'm saving loads for a mortage and I don't have lavish lifestyle.

I have a pension through work though. One thing though, I can't access it until I reach retirement age. I wish I could access it earlier if I wanted, I could retire earlier

You can get that from 50 years of age.

Bobeagleburger · 08-03-2019 5:50pm

Massive tax breaks for pension. It's a no brainer.

There's also a tax free lump sum of up to 200k at pension age that can be availed off.

Steer55 · 08-03-2019 7:01pm

We will have an older population but its not as bad as the UK and some other EU countries We also have a high amount of young people coming in from the EU to live and work in ireland, they in turn will pay taxes, prsi etc so its not all doom and gloom.

BailMeOut · 08-03-2019 7:12pm

Pension rules in Ireland are very generous. If you do not have a pension start one now and you need your head examined if you think not securing your old age is good idea. Setting up and self managing a PRSA is easy and you become very market aware and savvy very quickly when you do this. The tax benefits are really good in ireland, you can do lifetime contributions up to €2m (I think) and the amount you can contribute (tax free) increases as you get older. If you are young then it is a bigger no brainer as the small amounts you contribute each month have the advantage of time and a long vesting period to grow into a very nice nest egg. If you get matching contributions from your employer (free money) and still do not setup a pension then my goodness you are really stupid.

hmmm · 08-03-2019 10:45pm

Heres Johnny wrote: »

Never listen to someone that doesn't have one, they know they should be planning for the future and often don't want anyone else to either.

This. They're a bit like the anti-vaccers, all full of certainty about something they really know very little about, and giving people absolutely terrible advice.

The easiest way to start saving for a pension is to do it young, and put part of your pay increases in when you get them. Then you won't have to cut back on your lifestyle because you'll never have had it in the first place.

Jim2007 · 09-03-2019 7:41pm

Steer55 wrote: »

We will have an older population but its not as bad as the UK and some other EU countries We also have a high amount of young people coming in from the EU to live and work in ireland, they in turn will pay taxes, prsi etc so its not all doom and gloom.

Try and map your highly optimistic expectation against the demographic reality and forecasts there of. For a start you can't have young people coming into take over the burden, if the rest of the states are in the same or a worse position. By then the pyramid will have flipped and the social requirements will have grown exponentially so even if you were able to sustain the current workforce levels the tax and social security burden would be much greater.

Jim2007 · 09-03-2019 7:47pm

Deleted User wrote: »

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

You are talking about, while the state easily has more revenue to provide social services that it will have in say thirty or forty years time.... I won't even address your sense of self entitlement, but suffice to say it will not matter, because the resources will simply not be there.

Jim2007 · 09-03-2019 8:06pm

....... wrote: »

Oh yeah I mean Im not saying it would be a cushy existence, but its certainly doable if you were to get rid of the car and use the free travel, downsize into a more energy efficient property, and maybe share your home with someone else in the same boat if your partner/spouse wasnt around anymore.

I think 2 people living on 250 per week each in a small energy efficient property with no mortgage and sharing the costs for netflix etc would be ok.

Obviously the context here is that you cannot have the expectation of the same standard of living upon retirement as when you worked if you dont have a private pension. But I think a reasonable existence IS possible.

When you get to that age you will realise how wrong you were. Old people in general find it very difficult to make big adjustments to their lifestyle. And you are intending to maximise those changes when you are at the point in your life where you are least likely to be able to handle it. And of course you are assuming you'll have the health to be able to do it.

The current generation of pensioners in Switzerland are probably the worst hit because they are the cross over generation - the last ones to depend entirely on state pension. And I can tell you, I do not want to have to live like that, one of my neighbours is in that situation. They can afford to share a beer between them on Tuesdays and Thursdays, meat a couple of times a week, usually mince in some kind a pasta dish, the only time they get to go to a restaurant is on my birthday when we invite them to the local restaurant down the road. Little or no money for hobbies etc.... that is not living, it's existing or surviving.

Jim2007 · 09-03-2019 8:14pm

....... wrote: »

I find it hard to understand why someone couldnt live on 1k per month if they already owned their home and their only expenses were (subsidised) utilities, food, phone/tv etc...

Of course it will not be their only expenses! As any house owner will tell you, you will have to pay to maintain the house. There will also be medical expenses that are not covered, that you will either decide you have to do without or pay yourself.

Depending on your health at the time, you may need to make changes to your house to make it easier for yourself and so on.

BrianBoru00 · 09-03-2019 10:36pm

Jim2007 wrote: »

You are talking about, while the state easily has more revenue to provide social services that it will have in say thirty or forty years time.... I won't even address your sense of self entitlement, but suffice to say it will not matter, because the resources will simply not be there.

Err....theres absolutely no self entitlement here . .. .

Deleted User wrote: »

You will actually be penalised if you have savings going into the Fair Deal Scheme.
My mother was very good with money and had savings. These have all been assessed in her recent Fair Deal application. So now pays her FULL pension and some extra savings every week. Plus the Lien the Fair Deal have on her house. You are better off at her stage of life with nothing. She is 85. The less you have the more you get. You are heavily penalised for doing the decent thing and saving hard all your life. Believe me at Fair Deal time they take everything!

What he's stating is 100% true. If anything he's pointing out other peoples self entitlement, not his or his mothers.

looksee · 09-03-2019 10:54pm

I'm going to keel over at 80? I thought I had more than 8 years, reckoning on more like 18. And I am very grateful for my pension - when I was in my 20s and 30s I was invincible, could do anything. Now I'm not so sure and its very nice to have an income that does a little bit better than minimum existence.

Jim2007 · 12-03-2019 10:09am

BrianBoru00 wrote: »

Err....theres absolutely no self entitlement here . .. .

What he's stating is 100% true. If anything he's pointing out other peoples self entitlement, not his or his mothers.

In both cases they are expecting in 30+ years time someone will carry the can for them. Enough said.

Dempsey · 13-03-2019 5:28pm

I'm 36 and recently upped my Pension Contributions from 5% to 20%

So its actually just 12% from me and the other 8% is tax money that would have been just wasted by the government.

Pensions dont mess up, its the investment funds that people typically shove them into to get tax free growth is where the problem can be

Pensions are 20% or 40% tax relief, what saving or investment strategy with your disposable income will beat it?

Looking forward to the 200k tax free lump sum, might even take some of it at 20% tax aswell and go to Vegas for a night :pac:

BailMeOut · 13-03-2019 5:37pm

I am self employed and pay an estimated tax to revenue every month. At end of the year when doing my return I always owe money so just make an extra PRSA contribution that wipes out any tax owed. For example at end of the year my choice could be to pay revenue an extra €3,000 in taxes or simply save around €5,000 (accountant works out the exact amount) in my PRSA. It's a no brainer what to choose.

Pussyhands · 13-03-2019 8:02pm

Dempsey wrote: »

I'm 36 and recently upped my Pension Contributions from 5% to 20%

So its actually just 12% from me and the other 8% is tax money that would have been just wasted by the government.

Pensions dont mess up, its the investment funds that people typically shove them into to get tax free growth is where the problem can be

Pensions are 20% or 40% tax relief, what saving or investment strategy with your disposable income will beat it?

Looking forward to the 200k tax free lump sum, might even take some of it at 20% tax aswell and go to Vegas for a night :pac:

Sure people are always going on about how you should have a pension because there's no guarantee of a state pension, how can you guarantee they won't tax lump sums to **** when the time comes?

13-03-2019 8:27pm

Pussyhands wrote: »

Sure people are always going on about how you should have a pension because there's no guarantee of a state pension, how can you guarantee they won't tax lump sums to **** when the time comes?

Or that it will be worthless, or that you'll live to see it?

Hence my question earlier on, which I dont think got answered, someone thought they can pass it on to their children, I dont think so, not unless you'd taken a lump sum already, Id be interested to know that, but it does seem to be the best way to save, rather than having it all in low interest savings.

BailMeOut · 13-03-2019 9:18pm

Pussyhands wrote: »

how can you guarantee they won't tax lump sums to **** when the time comes?

because lawmakers also have pensions.

BailMeOut · 13-03-2019 9:20pm

1874 wrote: »

someone thought they can pass it on to their children, I dont think so, not unless you'd taken a lump sum already, Id be interested to know that, but it does seem to be the best way to save, rather than having it all in low interest savings.

Yes, pensions can be passed on to beneficiaries. If I die before I can access mine my wife gets it and if she passes away it goes to my kids. If you contribute to a pension the money in it is yours full stop.

the_syco · 13-03-2019 9:21pm

Midlife crisis man wrote: »

Who needs that much money at that age. Am I missing something here? You can't take it with you when you die.

Walk around Dublin, and you'll see old people begging for a pittance. I'm sure they though similar.

no.8 · 13-03-2019 9:23pm

Steer55 wrote:

The Irish were badly burned by bamk shares during the crash, Brendan Investments etc. Give me bricks and mortar any day.

Yawn

hmmm · 13-03-2019 9:42pm

Pussyhands wrote: »

how can you guarantee they won't tax lump sums to **** when the time comes?

Because it's ideas like that and the fear of ideas like that which keeps people voting centrist parties like FG & FF back into power - and they wouldn't want to annoy hundreds of thousands of voters. There's no guarantees of course, but you would assume TDs would know what the implications would be if they proposed this.

Why are people obsessed with getting a pension

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