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Why are people obsessed with getting a pension

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    #1232
    Blacktie.
    Registered Users Posts: 2,903 ✭✭✭Blacktie.


    cefh17 wrote: »
    July 2017 here, it's eye opening. I'm saving more per month than back then and still feel like I've more disposable money once you see how much you spend on ****e you don't need/want

    Why do it for so long though? I understand doing it for a few months to get an idea of where the money is going but surely once you've done that it's just repeating itself over and over. Like I done it and went pretty granular with it But after a few months of doing it I can't see much benefit.

    Also is it possible to make an AVC to your pension with last years left over tax relief not used and if so how would I go about doing this?


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    #1233
    GreeBo
    Registered Users Posts: 27,080 ✭✭✭✭GreeBo


    Blacktie. wrote: »
    Also is it possible to make an AVC to your pension with last years left over tax relief not used and if so how would I go about doing this?

    Contact your pension provider (or your employer)


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    #1234
    Blacktie.
    Registered Users Posts: 2,903 ✭✭✭Blacktie.


    GreeBo wrote: »
    Contact your pension provider (or your employer)

    I did they sent me a document that basically says to contact revenue. Thought I'd find a quick answer here of what's involved.


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    #1235
    GreeBo
    Registered Users Posts: 27,080 ✭✭✭✭GreeBo


    Blacktie. wrote: »
    I did they sent me a document that basically says to contact revenue. Thought I'd find a quick answer here of what's involved.

    Assuming you don't manage your own, I don't know why revenue would need to be involved tbh


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    #1236
    cefh17
    Registered Users Posts: 990 ✭✭✭cefh17


    Blacktie. wrote: »
    Why do it for so long though? I understand doing it for a few months to get an idea of where the money is going but surely once you've done that it's just repeating itself over and over. Like I done it and went pretty granular with it But after a few months of doing it I can't see much benefit.

    Also is it possible to make an AVC to your pension with last years left over tax relief not used and if so how would I go about doing this?

    I can see where you're coming from, it's more a habit at this stage, you're right that I don't really get the same benefit as the first few months gave. Nice to plan ahead and make sure I've enough put away for insurance by the time it's due


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    #1237
    NIMAN
    Registered Users Posts: 33,112 ✭✭✭✭NIMAN


    Long term they can be a good way of investing your money for the future, ignoring tax breaks etc.

    Just checked my pension and it's value is 2.7x greater than what has been put into it.


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    #1238
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    howamidifferent wrote: »
    The answer to the pension time bomb is for the government to come out tomorrow and state that from the first of January 45 years from now the pension will no longer be available to anyone not already on it. So start saving for your retirement now. Of course you have to look after those who are incapable of work but everyone else gets 45 years notice. If you don't provide your on your own.

    Nonsense, the State pension is not going away anytime soon in Ireland. There not even cutting long term people on the Dole and still handing out allowances and council houses like there's no tomorrow.

    As I previously mentioned people maxing out their pension from an early age will not spend the money in their retirement either. They will die with it in the bank.

    Its good to plan for your retirement but think people are completely overestimating how much money they actually need in retirement. Are you going to take a cruise every week or drive a new 7 series every year or something?

    There was a post here of a 26 year old a while back maxing out their pension while renting a room in Dublin. That's just absolutely crazy.


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    #1239
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,032 Mod ✭✭✭✭Jim2007


    snoopboggybog wrote: »
    Nonsense, the State pension is not going away anytime soon in Ireland.

    You won't need it anytime soon and if you continue to keep your head stuck in the sand and ignore all the discussions and research papers that have been discussed in the last few years, you will be in for a surprise when you do need it.


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    #1240
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    Jim2007 wrote: »
    You won't need it anytime soon and if you continue to keep your head stuck in the sand and ignore all the discussions and research papers that have been discussed in the last few years, you will be in for a surprise when you do need it.

    They are not going to let old people die of starvation. Worst that will happen is that they will bring in an additional payment out of your wages for the state pension in the future. People born after a certain will have this tax taking out of their wages. That is worst case scenario.

    I do have a pension, paying 6% and employer matching 6% which will do me on retirement. What I don't understand is people putting every cent possible into their pension now and not touching it till retirement. It doesn't make any sense to me waiting 35 years for it.

    If you don't enjoy the money now, you will die with it in your bank account.


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    #1241
    S.M.B.
    Registered Users Posts: 9,358 ✭✭✭S.M.B.


    Or that it's means tested so anyone with a house and a decent amount of savings could be exempt from getting it.

    I would imagine anyone putting every cent possible into a pension has a justifiable reason rather than doing it out of ignorance or stupidity. People have very different long term financial goals and there are various ways to get there.


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    #1242
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    S.M.B. wrote: »
    Or that it's means tested so anyone with a house and a decent amount of savings could be exempt from getting it.

    I would imagine anyone putting every cent possible into a pension has a justifiable reason rather than doing it out of ignorance or stupidity. People have very different long term financial goals and there are various ways to get there.

    Your own home will never be affected, i can guarantee that.

    Means tested maybe to some extent but not like your going to get zeroe.

    It's not ignorance but probably stupidity. Live frugal now, you'll live that way for the rest of your life. You'll die with the money in the bank.


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    #1243
    Yellow_Fern
    Registered Users Posts: 2,576 ✭✭✭Yellow_Fern


    snoopboggybog wrote: »
    Your own home will never be affected, i can guarantee that.

    Means tested maybe to some extent but not like your going to get zeroe.

    It's not ignorance but probably stupidity. Live frugal now, you'll live that way for the rest of your life. You'll die with the money in the bank.

    I think most people are prone to life style creep, ie you might rough a hostel when you are 25 when you visiting Lisbon but not when you are 65.


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    #1244
    Klonker
    Registered Users Posts: 1,667 ✭✭✭Klonker


    snoopboggybog wrote: »

    As I previously mentioned people maxing out their pension from an early age will not spend the money in their retirement either. They will die with it in the bank.

    Its good to plan for your retirement but think people are completely overestimating how much money they actually need in retirement. Are you going to take a cruise every week or drive a new 7 series every year or something?

    There was a post here of a 26 year old a while back maxing out their pension while renting a room in Dublin. That's just absolutely crazy.

    I don't know about other people but I'm in my 30s and I'm maxing my contributions. The main reasons are:

    I don't want to worry about not having enough money in retirement. I'm a worrier, that's my personality. I'd rather be safe than sorry and have too much than too little.

    Like most people I plan to have children in life. I hope they don't need much from me financially in their adult life but I want to be able to help them if they do need it and probably even if they don't. I'd love to be able help with a deposit or wedding or to bring the whole family on a nice foreign sun holiday on me like its not big thing.

    If myself and partner die with a load of our cash not spent, well I'll be happy that it will go to my family and help give them a more comfortable. I'm not stuck for money but my parents help me anyway from time to time and I really appreciate it and I know it makes them happy too. I'd love to be able to do similar with my children.


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    #1245
    Padre_Pio
    Registered Users Posts: 4,940 ✭✭✭Padre_Pio


    Klonker wrote: »
    I don't know about other people but I'm in my 30s and I'm maxing my contributions.

    Im maxing it till I have kids, then I'll cut back knowing I already have a good lump sum gaining interest.

    Imagine having no pension and trying to pay into a fund whole putting kids thru college..


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    #1246
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    I honestly think both of ye are mad to be honest. I have a pension paying 6% with my employer matching 6%

    Is there not something you'd like to spend the money on now? Why do you think you need a ton of money in retirement which is 30 years or more down the line.

    I just find it mad is all your maxing out your pension at an early age.

    I presume both of you have a mortgage?


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    #1247
    S.M.B.
    Registered Users Posts: 9,358 ✭✭✭S.M.B.


    snoopboggybog wrote: »
    Your own home will never be affected, i can guarantee that.

    Means tested maybe to some extent but not like your going to get zeroe.

    It's not ignorance but probably stupidity. Live frugal now, you'll live that way for the rest of your life. You'll die with the money in the bank.
    Not sure how someone could be so certain it wouldn't be assessed along the lines of Fair Deal and if is means tested property should be taken into account.

    Without knowing an individuals circumstances I don't think you can say stuff like it's ridiculous or people are going to die with money in the bank.


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    #1248
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    S.M.B. wrote: »
    Not sure how someone could be so certain it wouldn't be assessed along the lines of Fair Deal and if is means tested property should be taken into account.

    Without knowing an individuals circumstances I don't think you can say stuff like it's ridiculous or people are going to die with money in the bank.

    I can safely say it as its my opinion.

    The state pension will be there and thinking your protecting yourself is making excuses for having money tied up for the next 30 years.


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    #1249
    anewme
    Registered Users Posts: 11,869 ✭✭✭✭anewme


    S.M.B. wrote: »
    Not sure how someone could be so certain it wouldn't be assessed along the lines of Fair Deal and if is means tested property should be taken into account.

    Without knowing an individuals circumstances I don't think you can say stuff like it's ridiculous or people are going to die with money in the bank.

    Interesting point on fair deal. I've seen 2 people go through fair deal recently.

    One person had nothing. He sailed through process.

    The other person had a home and a few Bob saved. As his son said to me...hes in the worst position... not rich but not poor.

    It definitely made me think about why we bother...especially those who will end up with a mediocre pension. I want to have enough so I've a nice lifestyle, but to spend it all so it's not left behind me. Reckon 2,500 per month total (between private pension plus state) plus a few hundred grand in the bank is enough.


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    #1250
    Padre_Pio
    Registered Users Posts: 4,940 ✭✭✭Padre_Pio


    snoopboggybog wrote: »
    I honestly think both of ye are mad to be honest. I have a pension paying 6% with my employer matching 6%

    Is there not something you'd like to spend the money on now? Why do you think you need a ton of money in retirement which is 30 years or more down the line.

    I just find it mad is all your maxing out your pension at an early age.

    I presume both of you have a mortgage?

    I have more money than I can spend. Pension is a good tax avoidance scheme, better than having in the bank.


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    #1251
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    snoopboggybog wrote: »
    I honestly think both of ye are mad to be honest. I have a pension paying 6% with my employer matching 6%

    Is there not something you'd like to spend the money on now? Why do you think you need a ton of money in retirement which is 30 years or more down the line.

    I just find it mad is all your maxing out your pension at an early age.

    I presume both of you have a mortgage?

    I think it depends on your income. If you are on a high income then it certainly makes sense to max contributions but the lower your salary the less it makes sense to max out (it always makes sense to have a pension). It’s a valid point too in relation to other costs.

    I was in a public service job for a number of years so had a mandatory contribution and a large employer contribution. I changed to private sector to a company with no pension plan, they don’t as yet make contributions etc and as I’m saving up as much as I can towards a deposit/house build I haven’t started any pension at all yet. I think a few years of no pension is worth it to go into my house build with as much cash as possible. My salary is pretty decent but not enough to save as I want to, have the lifestyle I want and pay any pension that would be worth while. I’m probably on about half the salary my role would attain also and I could move elsewhere but I’m taking a gamble that staying put will in the long run result in far higher salary than would be possible elsewhere and that would enable me to load my pension later plus save a lot.

    I also have a family farm which I will eventually take on to run part time and while it doesn’t bring in much money it will still be an additional source of income in future when I retire so not reliant totally on a pension and I’ll have an income from the farm for life (as I’ll never retire from that).


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    #1252
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Deandre Wooden Selflessness wrote: »
    ....I’m probably on about half the salary my role would attain also and I could move elsewhere ...... but I’m taking a gamble that staying put will in the long run result in far higher salary than would be possible elsewhere and that would enable me to load my pension later plus save a lot.
    ...

    Why do you reckon your employer is going to pay you way more in years to come when you currently reckon you can earn double elsewhere?
    You reckon you're salary is going to double & then go up more again to far higher then would be earned elsewhere?

    Using crude numbers...... On 50k, could be on 100k elsewhere but plan to be on 150k eventually where you are now and the folk on 100k elsewhere currently won't be on more than that when you're on 150k :confused:

    Also, you're far from a graduate presumably.


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    #1253
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Augeo wrote: »
    Why do you reckon your employer is going to pay you way more in years to come when you currently reckon you can earn double elsewhere?
    You reckon you're salary is going to double & then go up more again to far higher then would be earned elsewhere?

    Using crude numbers...... On 50k, could be on 100k elsewhere but plan to be on 150k eventually where you are now and the folk on 100k elsewhere currently won't be on more than that when you're on 150k :confused:

    Also, you're far from a graduate presumably.

    I don’t really want to go into specifics but the area where I’ve build up a strong set of skills is still a fairly new/niche thing in Ireland in particular but has the potential to become very sought after in the next few years. If I was to work elsewhere in Ireland now it would not be doing the same job but rather using some of my skills/expertise applied to a different area of work.

    If I was willing to go abroad I could get paid much more in a similar role but I’ve no interest in moving and in Ireland the demand isn’t there yet but when/if it does kick in there won’t be many who can do the job initially and that puts you a person in a very strong position.


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    #1254
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    Deandre Wooden Selflessness wrote: »
    I don’t really want to go into specifics but the area where I’ve build up a strong set of skills is still a fairly new/niche thing in Ireland in particular but has the potential to become very sought after in the next few years. If I was to work elsewhere now it would not be doing the same job but rather using some of my skills/expertise applied to a different area of work.

    If I was willing to go abroad I could get paid much more in a similar role but in Ireland the demand isn’t there yet but when/if it does kick in there won’t be many who can do the job initially and that puts you in a very strong position.

    I think your cracked, even if the skills are sought after five years down the line the amount of money your missing out on now is crazy. Even if your wages double down the line you could be getting these wages allready.

    Lets just say if there is a fad happening other companies won't be long picking it up. Its not like your going to be the only company in Ireland doing it, maybe initially but other companies will soon follow shop.

    Does you company have a patent or something on the idea that only allows your company to do it or something?


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    #1255
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    snoopboggybog wrote: »
    I think your cracked, even if the skills are sought after five years down the line the amount of money your missing out on now is crazy. Even if your wages double down the line you could be getting these wages allready.

    I would not be waiting anywhere near 5 years to be on double what I’m on now. From what I can see from people who would be working in similar roles to what I could be is it’s easy enough to get to 80-100k but then it’s very very difficult to go higher especially if you don’t want moving to a different part of the country or even leaving the country. I’d be hoping to be on far higher in years to come much more than most can get to in the other roles I mention.

    snoopboggybog wrote: »
    Lets just say if there is a fad happening other companies won't be long picking it up. Its not like your going to be the only company in Ireland doing it, maybe initially but other companies will soon follow shop.

    Does you company have a patent or something on the idea that only allows your company to do it or something?

    Probably worded it wrong in the other post, it’s not really anything special do so with the company I’m working for no patents or anything like that just it’s one area where they are devoting some resources that not many are. The hope would be that more places would also start doing it as that’s when I really get to pick my price as there would not be a large pool of people with the necessary experience. There are other reasons too I’d not be rushing somewhere else, location is where I want to live, I enjoy the work etc.


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    #1256
    snoopboggybog
    Closed Accounts Posts: 454 ✭✭snoopboggybog


    Deandre Wooden Selflessness wrote: »

    Probably worded it wrong in the other post, it’s not really anything special do so with the company I’m working for no parents or anything like that just it’s one area where they are devoting some resources that not many are. The hope would be that more places would also start doing it as that’s when I really get to pick my price as there would not be a large pool of people with the necessary experience. There are other reasons too I’d not be rushing someone else, location is where I want to live, I enjoy the work etc.

    AH sorry get you now, I could easily add 30K to my wages if I went to Dublin but never going back to that crap hole.

    Can't beat a 8KM drive to work every day with parking and basically no traffic.


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    #1257
    Carl D
    Banned (with Prison Access) Posts: 25 ✭Carl D


    Hi I'm 29 and looking at starting my own penison I dont no where to start, how much would I need to save to get a good pension .
    I'm thinking of buying a property and renting it out , let if pay off itself and by the time I decide to retire I can live off rent from that would be around 2500 a month

    I currently have a granny flat rented out beside my parents house it's pretty much paid off now.

    Any advice is welcome.


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    #1258
    king_of_mayo
    Closed Accounts Posts: 127 ✭✭king_of_mayo


    Carl D wrote: »
    Hi I'm 29 and looking at starting my own penison I dont no where to start, how much would I need to save to get a good pension .
    I'm thinking of buying a property and renting it out , let if pay off itself and by the time I decide to retire I can live off rent from that would be around 2500 a month

    You'll get a lot of different responses but here's my 2c.

    Property is a horrible pension plan. Your so exposed to 1) the Irish economy 2) the Irish property market and 3) one specific part of it. Say you live in a small town and a big local business closes up, your property is massively exposed to micro economic shocks like that. Or of course another housing bubble. Or even, what if you end up with some crap tenants and have to spend years fighting through the system to get rid of them with no rent incoming?

    I won't tell you want to do but I'll share what I do. I plow my money into a private pension plan, and have all of it in a global equity tracker fund. No fuss, no muss.

    A very rash rule of thumb is when you start your pension, to put away half your age as a percentage of your salary. Now that ignores lots of things but it's a starting point for your thought process.

    Does your employer offer e a pension scheme? Any matching contributions?


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    #1259
    king_of_mayo
    Closed Accounts Posts: 127 ✭✭king_of_mayo


    snoopboggybog wrote: »
    I honestly think both of ye are mad to be honest. I have a pension paying 6% with my employer matching 6%

    Is there not something you'd like to spend the money on now? Why do you think you need a ton of money in retirement which is 30 years or more down the line.

    Of course. Friend of mine bought a new, yes brand new, car last weekend. It looks lovely and I've found myself day dreaming about one since.

    There's a fair wage coming into this house and we no doubt could afford stuff like that if we wanted. But the key is the last part of your quote. "30 or more", nah I won't be waiting that long for retirement. And being financially secure makes me quite happy.


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    #1260
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,032 Mod ✭✭✭✭Jim2007


    snoopboggybog wrote: »
    The state pension will be there and thinking your protecting yourself is making excuses for having money tied up for the next 30 years.

    From a factual point of view why will the state pension still be there are we know it in 30 years time.

    The Irish state pension is a pay as you go system, just like most of the rest of the EU and the demographics are against it. So what is your factual basis for claiming that they are all wrong?

    And of course even if you were right, it does not matter since they are all hell bent on moving to the three tier system in any case.

    So no matter what you may think, the state pension as it exists today is not going to be around when it's your turn. It is either going to have been confirmed as unsustainable or the political will will have moved it in any case.


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    #1261
    AnRothar
    Registered Users Posts: 541 ✭✭✭AnRothar


    Jim2007 wrote: »

    So no matter what you may think, the state pension as it exists today is not going to be around when it's your turn. It is either going to have been confirmed as unsustainable or the political will will have moved it in any case.

    https://www.fiscalcouncil.ie/%20long-term-sustainability-report/
    Fiscal council would appear to agree.


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