Is now a bad time to open a pension fund? savings account better?

Freiheit

I'm thinking maybe of just a small weekly contribution,but given the markets would a high interest savings account be better for now? maybe convert it to a pension later?.

Danke
F

homer911

I would have thought that now was the perfect time to start a pension..

imitation

I started a pension in late 2008 and used one of the higher risk options as most people reckoned things would only get better from there on out... Anyway, its just about kept its head above water with all the troughs and peaks. When things finally do take off again I will probably leave it for a year or two and then put it into a "safer" bracket.

I think a pension fund is worthwhile, despite the fact the government have seen to fit to start dipping into them, they still work out a lot lower than DIRT at 25%.

It depends on what stage in your life you are at too, if you are young your likely going to need money for other projects in your life, like a house, and you dont want to have all that money locked into a fund that you wont be able to use for 40 years.

Freiheit

Hi I'm 33 and was thinking just of something small,like 10 Euro per week, a waitress friend said she pays 8 per week. So what is dirt then on pensions? If I die at any point I assume the money will be there for inheritance?. Is Aviva an ok place to look?.

Pablo Sanchez

Freiheit wrote: »

Hi I'm 33 and was thinking just of something small,like 10 Euro per week, a waitress friend said she pays 8 per week. So what is dirt then on pensions? If I die at any point I assume the money will be there for inheritance?. Is Aviva an ok place to look?.

No DIRT tax applies to pension savings, any gains you make 'roll up' tax free, you also receive tax relief on your contributions at your marginal rate. There is a 0.6 levy on a number of pension funds for the next 3 years (this years has already been applied in late Jun).

In the event of death the pension value woud be transferred to your estate.

Pensions do not have to have a large amount of risk attached, you will have any number of funds you can choose from. Although at 33 you wont be able to touch it for at least 27 years, its not worth being too risk adverse at this stage.

Comparing pension providers you should examine the fund choices you would have and the fees that are payable.

therightangle

I hope I have posted this in the right place....

I have a Quinn Freeway Pension that started in 07 at the end of the SSIA. It appears that 13k was paid in with 10k current value, which seems like a bad deal, with about 700 alone dropped in the last 2 months, if I am reading it right.

Any advice as to whether I should switch over completely to cash/bond fund? Or does it make any sense to encash and lodge in a deposit account? Any other possible options for someone 20+ years before retirement?

therightangle

homer911 wrote: »

I would have thought that now was the perfect time to start a pension..

Im curious to know why so? Is it because you think share prices are perceived to be bottoming out?

Freiheit

Both Aviva and BOI offer plans starting at E25 per month,is this money guaranteed?. If it was I think I'd go for it,but how does the stock market affect pensions?. I understand how it could affect the value,but is the money invested generaly guaranteed?.
Tanx

homer911

therightangle wrote: »

Im curious to know why so? Is it because you think share prices are perceived to be bottoming out?

1. The longer you leave it to start a pension, the more it will cost you or the less it will be worth
2. You have avoided the 0.6% government tax for this year
3. The state pension is going to be worth very little by the time you retire
4. Based on historical trends, stock markets are at a low
5. Existing tax relief will take a lot of the sting out of any downside
6. Future tax reliefs are being reduced

homer911

Freiheit wrote: »

Both Aviva and BOI offer plans starting at E25 per month,is this money guaranteed?. If it was I think I'd go for it,but how does the stock market affect pensions?. I understand how it could affect the value,but is the money invested generaly guaranteed?.
Tanx

You can put your pension contribution into a cash fund which is effectively guaranteed, but then you wont make any significant growth in the fund. "Prices can go down as well as up" applies to anything other than a cash fund

coffee_cake

therightangle wrote: »

I hope I have posted this in the right place....

I have a Quinn Freeway Pension that started in 07 at the end of the SSIA. It appears that 13k was paid in with 10k current value, which seems like a bad deal, with about 700 alone dropped in the last 2 months, if I am reading it right.

Any advice as to whether I should switch over completely to cash/bond fund? Or does it make any sense to encash and lodge in a deposit account? Any other possible options for someone 20+ years before retirement?

with that long to go i'd leave it as it is or you might end up freezing it into a low value
talk to an advisor about it though

Pablo Sanchez

homer911 wrote: »

You can put your pension contribution into a cash fund which is effectively guaranteed, but then you wont make any significant growth in the fund. "Prices can go down as well as up" applies to anything other than a cash fund

Its important to factor in policy charges though,if the charge is 1% and the fund makes only 0.95% then your not even standing still.

therightangle

bluewolf wrote: »

with that long to go i'd leave it as it is or you might end up freezing it into a low value
talk to an advisor about it though

Got the jitters last week and moved it to Cash (within Quinn). Right or wrong I dont know, but I wasnt prepared to let it slide further considering the negative outlook. Thanks for the response.