Pension worth 2.7m!

slumped

Hi All,

I was shocked to learn that in 28 odd years, my pension is going to be worth 2.7m euro.

This seems astonomical (and is in today's terms).

I put full amount in at present and plan to continue this.

Even if I retire at 55 the pension will be worth 1.6m in todays terms.

How does this compare to other pensions people have?

Also - are there any loans etc. available to me with pension as the security?

Slumped

Colonel Sanders

I got my DC update a few months ago. Was amazed at the value of my pension in todays money (altho one or 2 of the assumptions are optimistic). Advice to everyone, start as soon as you can and put the full whack in if you can. If one is on the higher tax band and are getting employer contributions it adds up pretty quickly

daveirl

This post has been deleted.

slumped

i currently put 10% in and employer puts 5%.

in real terms the 10% is only costing me about 59% of that (41% tax etc)

If I can afford to maintain full contributions then I'm quittin early!

S

Colonel Sanders

I was getting 4% from my employer no questions asked and then I was putting the max in (15% due to my age). Employer also matched the first 6% of my contributions so it meant that I was paying 15% (only costing me kless than 8% of net salary due to tax and PRSI relief) and my employer was contributing 10%.

slumped

pension company messed it up

it's not worth 2.7m - it will be worth 4.23m at 65

At 60 it is worth 2.7m!

S

daveirl

This post has been deleted.

stepbar

slumped wrote:

Hi All,


Also - are there any loans etc. available to me with pension as the security?

Slumped

Pension backed mortgages are all the rage now. However they are confined to company directors AFAIK.

A Random Walk

Compounding is your friend What assumptions are being used to come to that figure?

slumped

A Random Walk wrote:

Compounding is your friend What assumptions are being used to come to that figure?

They are allowing a modest 6% per annum growth with an inflation rate of 5% pa.

To date the fund has had growth of 12% (last 5 years).

S

Bottle_of_Smoke

slumped wrote:

Hi All,

I was shocked to learn that in 28 odd years, my pension is going to be worth 2.7m euro.

This seems astonomical (and is in today's terms).

I put full amount in at present and plan to continue this.

Even if I retire at 55 the pension will be worth 1.6m in todays terms.

How does this compare to other pensions people have?

Also - are there any loans etc. available to me with pension as the security?

Slumped

Mind if I ask how much you contribute every month?

00112984

slumped wrote:

How does this compare to other pensions people have?

My company pays 15% and I have the option of contributing, if I want. I add 5%.

uberwolf

slumped wrote:

Hi All,

I was shocked to learn that in 28 odd years, my pension is going to be worth 2.7m euro.

This seems astonomical (and is in today's terms).

My grandfather bought his semi-d in Rathgar, complete with 1/3 acre garden for £2K. So it's very hard to get my head around how little or much that sum might actually be worth in relative terms. You're right though, it's mad to consider.

With a pension such as yours, you can not use it as any kind of security for a loan.

Even directors based one's are effectively gentlemens agreements to utilise the maturing pension to repay the loan. Something you can not take advantage of

slumped

you technically don't have to be a director or self-employed.

there is one lender at least that will make exceptions.

i put in 15% every month. (max allowed at present)

A Random Walk

slumped wrote:

They are allowing a modest 6% per annum growth with an inflation rate of 5% pa.

Is that a 1% real growth rate or 11% nominal? If it's 11% it's too high, if 1% hopefully too low.

But yes you'd be amazed at the figures you can project based on long term compounding. You should make sure to subtract inflation, and with the remaining lump sum estimate a real income of about 4% of that amount as your actual yearly pension.

sofireland

Regulatory wise, they can only run projections at 6%, allowing for increasing of contributions annually @ 5% to allow for inflation.