What % return expected from a Pension?

gbh2930

If I invest in a pension, what percentage return should I expect per year? What is the standard they should be measuring up to?

3DataModem

Depends in what it's invested in.

coylemj

There is no absolute benchmark because different funds will invest in different markets which in turn involves currency risk and exposure to equity markets in different parts of the world.

chris85

This is a piece of string type question really. Depends on investment type. The more you expose your funds to high risk products the greater the chance for a higher return. But this brings risk of loses as well.

spaceHopper

I've been paying into one for 12 years it's down 10% at the moment taking in to account inflation and it's well down

coylemj

spaceHopper wrote: »

I've been paying into one for 12 years it's down 10% at the moment taking in to account inflation and it's well down

Is there a big chunk invested in property or did you switch from managed funds to cash or fix-interest after the recent crash?

I ask because some stocks are almost back to their pre-crash levels so you really shouldn't be down that much after 12 years, unless you have a big exposure to property (still in the doldrums) or you panicked and switched out of managed funds when the crash happened so you missed the recent bounce.

clairedavies

I have been really unhappy with my pension for sometime and have now opened a savings account with yourgolfund.com whereby I buy a bit of gold each month. I'm not interested in taking any money from it for the next 30 years and can't see how it could fail over the long term. But then nothing is a safe bet these days! Doesn't have the same tax savings as a pension which is really the only downfall for now but I'm happy with the diversification. Goldcore also offer a savers account but there's is for €150 per month and not as flexible.

clairedavies

Sorry, in answer to your question - the gold savers account has had around a 14% return per annum over the last 12 years or so BUT this is likely to drastically reduce as the economy smooths out. Really I guess you just have to think whether or not gold prices will be higher at the time you retire than they are today? And then you're onto a winner, if you choose this route.

digzy

dont worry, by the time irish life or friends first take their third, most of the rest will have been eaten up by inflation. thats presuming the numbskulls investing it dont loose even more of it.
I'd seriously consider the an post long term deposit account. You've a guaranteed 50% return over 10 years with no DIRT tax.
Most of the 'advisers'-obviously there's a few on here-dont tell clients about it cos they dont get a cut. I heard eddie hobbs rubbish it a few years back.....wonder what the investors in 'brendan investments' think;)

Jim2007

clairedavies wrote: »

I'm not interested in taking any money from it for the next 30 years and can't see how it could fail over the long term.

You are buying a product who's value is more or less entirely dependent on fear and greed, not economic achievement. So in order to get a return you are hoping that people will be either more fearful or more greedy in 30 years time :pac:

For myself, I never investing anything who's value is determined by rumor, fears or greed.

coffee_cake

digzy wrote: »

dont worry, by the time irish life or friends first take their third, most of the rest will have been eaten up by inflation. thats presuming the numbskulls investing it dont loose even more of it.
I'd seriously consider the an post long term deposit account. You've a guaranteed 50% return over 10 years with no DIRT tax.
Most of the 'advisers'-obviously there's a few on here-dont tell clients about it cos they dont get a cut. I heard eddie hobbs rubbish it a few years back.....wonder what the investors in 'brendan investments' think;)

it's rubbish because you get over 4% pa instant access on most savings accounts these days. 4.1% was the latest i've seen.
50% to lock up your money for 10 years works out at... 4.14%. 3 years into that you might find instant access accounts moved up to 4.4% for example, and you're still stuck at 4.14% unless you pay some penalty or whatever for withdrawing early from the national bond

Jim2007

bluewolf wrote: »

it's rubbish because you get over 4% pa instant access on most savings accounts these days. 4.1% was the latest i've seen.
50% to lock up your money for 10 years works out at... 4.14%. 3 years into that you might find instant access accounts moved up to 4.4% for example, and you're still stuck at 4.14% unless you pay some penalty or whatever for withdrawing early from the national bond

I would not be so quick to dismiss the bonds... It's the old story or risk versus return - bank rates are high at present because of the banking concerns, but sooner or later deposit rates will revert to the euro zone levels.... and that is not 4%

digzy

bluewolf wrote: »

it's rubbish because you get over 4% pa instant access on most savings accounts these days. 4.1% was the latest i've seen.
50% to lock up your money for 10 years works out at... 4.14%. 3 years into that you might find instant access accounts moved up to 4.4% for example, and you're still stuck at 4.14% unless you pay some penalty or whatever for withdrawing early from the national bond

Did you ever hear of DIRT. Doesn't apply to the state scheme:eek:
op also stated it was a long term investment he/she was making.dunno if you're aware how old one must be before cashing in a pension:rolleyes:
I wouldnt put money in myself for a number of reasons but it's a good move for some and worth considering.

FernandoTorres

digzy wrote: »

dont worry, by the time irish life or friends first take their third, most of the rest will have been eaten up by inflation. thats presuming the numbskulls investing it dont loose even more of it.
I'd seriously consider the an post long term deposit account. You've a guaranteed 50% return over 10 years with no DIRT tax.
Most of the 'advisers'-obviously there's a few on here-dont tell clients about it cos they dont get a cut. I heard eddie hobbs rubbish it a few years back.....wonder what the investors in 'brendan investments' think;)

You sound like someone who has had a bad experience, but that's no need to sensationalise and make it out as if the whole industry is corrupt. Firstly I have never heard of any life co taking a third as you say. If you are in any way a shrewd planner you should be getting 100% allocation and 1% AMC or less. It's not that hard to find.

Secondly, in a DC plan, the "numbskull" responsible for investing is YOU. YOU have full control over where your fund is invested, something many Irish people seem to not realise/not care about. If you are losing a load of your fund and are annoyed then it's partly your own fault for not researching and knowing your own risk tolerance.

I agree with you on the An Post scheme, I think it's good but not everyone is looking for the same thing. Many, many people have invested in equities and done very well but unfortunately due to bad advice and people being ignorant it's also gone wrong for a lot of people. I suppose it's always easier to blame the advisor though.

The truth is there are many INDEPENDENT financial advisors out there who do a great job and are not dependent on commission. I think this whole crisis will make us a more financially literate country and hopefully there will be a move more towards this type of advice rather than the snake-oil salesmen of the past.

FernandoTorres

digzy wrote: »

dont worry, by the time irish life or friends first take their third, most of the rest will have been eaten up by inflation. thats presuming the numbskulls investing it dont loose even more of it.
I'd seriously consider the an post long term deposit account. You've a guaranteed 50% return over 10 years with no DIRT tax.
Most of the 'advisers'-obviously there's a few on here-dont tell clients about it cos they dont get a cut. I heard eddie hobbs rubbish it a few years back.....wonder what the investors in 'brendan investments' think;)

You sound like someone who has had a bad experience, but that's no need to sensationalise and make it out as if the whole industry is corrupt. Firstly I have never heard of any life co taking a third as you say. If you are in any way a shrewd planner you should be getting 100% allocation and 1% AMC or less. It's not that hard to find.

Secondly, in a DC plan, the "numbskull" responsible for investing is YOU. YOU have full control over where your fund is invested, something many Irish people seem to not realise/not care about. If you are losing a load of your fund and are annoyed then it's partly your own fault for not researching and knowing your own risk tolerance.

I agree with you on the An Post scheme, I think it's good but not everyone is looking for the same thing. Many, many people have invested in equities and done very well but unfortunately due to bad advice and people being ignorant it's also gone wrong for a lot of people. I suppose it's always easier to blame the advisor though.

The truth is there are many INDEPENDENT financial advisors out there who do a great job and are not dependent on commission. I think this whole crisis will make us a more financially literate country and hopefully there will be a move more towards this type of advice rather than the snake-oil salesmen of the past.