Pensions.. A Good/Bad time?

quintron

Please excuse economic ignorance but I have a simple question really and hope someone can help.

Is now a good (funds, investments wise, long term etc) or bad (country falling apart, notions of nationalization of banks etc) time to set up a personal pension fund?

I'm with AIB and looking at their PRSA or PPP options.
I want to move my savings over from my deposit account into one of the above but, knowing next to nothing about pensions, beyond what I've read on the boards and perused from bank brochures, I'm still unsure if the "current economic climate" = a good time to set up a pension or a really bad idea for the next couple of years.

Thanks for any pointers in advance.

Q

broker2008

One used to say that is was always a good time to invest in a pension

Assuming that you can afford to pay premiums and that there will be tax relief if you are paying tax, you will be building up a fund by buying units at different prices. the cheaper the price of these units, the greater the potential to increase the value of the fund. So if you bought units that cost €1 this year, say €2 the year after etc etc, it would be a nice sized fund that would be built up in say 20 years when the unit price was say €20.

However very different fund if you were buying units for years at say €18-€20 and the value at retirement say now was €1.

Get investing.

quintron

broker2008 wrote: »

if you bought units that cost €1 this year, say €2 the year after etc etc, it would be a nice sized fund that would be built up in say 20 years when the unit price was say €20.

However very different fund if you were buying units for years at say €18-€20 and the value at retirement say now was €1.

Get investing.

Thanks broker2008. Thats what I kind of assumed.
However, its a question of faith in the banking system itself.
I'm not so much worried about the rise and fall over time, which is inevitable, now being a big fall ..and an outcome of the inherent risk in investments, but I suppose I'm worried about the security of the system itself.
Would it be a better option to go for cash bonds (is that even right?? - low yield, safer etc) to begin with?
I suppose I'm answering myself in a way here, sorry if its a bit muddled, but would love to hear some others opinions!

broker2008

AIB's PRSA's offer a good selection of funds. Personally, and this is not advice, I think you should be investing in the cheap markets in the hope that they don't become cheaper.

MB74

Definitely more units for you buck at the moment.

Don't just limit yourself to the banks however but have a look at your local broker, certainly we can offer you access to more options than a bank that may be tied in with a limited number of providers.

stepbar

A pension is never a "bad" investment per se. People just need to be more proactive about same. And by that I mean at least a review of same every 6 months to see how same is performing, include a review on charges. Remember a pension is a provision for ones retirement, and not savings in the true word. So beware. Investments do rise and fall. How risk adverse you are will determine the sort of pension you go for.

ferga_com

Here's a link to a Motley Fool article that might give you some historic perspective. Although nobody can accurately predict when, I'd believe that the markets will right themselves so putting money regularly into a pension plan over a long period of time is still a good idea, in my opinion.

Regards, Liam