Whats your private pension fund worth?

seamus

Elessar wrote: »

Bloody hell. To get a 30k pension (which includes the state pension) I'll need to drop another €600 per month into it :eek:

...before tax, remember. That's less than €300/month from your take-home.

CruelCoin

31

Approx 50-60%

Moo Moo Land

I reckon there will be a lot of elderly people on the breadline in about 20-25 years

CruelCoin

Moo Moo Land wrote: »

I reckon there will be a lot of elderly people on the breadline in about 20-25 years

There is the mother of all cluster**** trains rolling down the lines...

The pension bill is going to balloon and there isn't a sensible plan anywhere on how we're going to pay for it, especially seeing as how the pension pots are in deficit right now...

Greyian

seamus wrote: »

...before tax, remember. That's less than €300/month from your take-home.

It would be €360/month. You save on the 40% PAYE (assuming you're on the higher rate), not on the USC or PRSI.

listermint

hmmm wrote: »

A normal equity fund would have recovered all its losses since then. Even more when you consider investing in a pension is tax free.

People can choose how much risk they want to take in their investments. What they can't control is how much money an Irish government is going to look to steal.

Interested in how people can control how much risk the want to take on their investments if many schemes are mandated by the company you work for. i.e there is no choice.

Above sounds like Pensions Broker Speak, if you dont mind me pointing that out.



There are many strands to this conversation, the overall 'its a great idea everyone should do it this way' needs to be challenged.

sbsquarepants

mahoganygas wrote: »

A private pension is one of the most tax efficient ways of saving. Especially if your employer contributes. I'm amazed at the amount of people who don't take advantage of employer contributions. It's free money!!

I really do fear a populist government dipping into private pensions to pay for those who can't pay / won't pay.
The pension levy set a dangerous precedent.

An aging population along with a low uptake in people taking responsibility for their retirement will soon lead to a huge poverty gap.

The government have already set a precedent by skimming pensions to pay for their stupidity - I just don't trust mine.
I have one but I started lateish, mid 30's & only pay in around 150 month (job used to match that, but now they only put in 10%) Can't remember the exact figure but my last statement said all going well, if I retire at 65 (in 23 years) i'll have the princely sum of €4,500/ year to live on. I just don't trust it enough to put anymore in though - it's already been robbed once, I very much doubt it will be the last time.

hairy_head

interesting thread , its one of the reasons voters should be appalled at the push by politicians ( especially FF ) to raise the current old age pension , the old age pension should be reduced , raising it does nothing to bring home the message of the impending pension time bomb , it does the opposite

pensioners in 2016 are spoiled beyond belief

MeatTwoVeg

hairy_head wrote:

interesting thread , its one of the reasons voters should be appalled at the push by politicians ( especially FF ) to raise the current old age pension , the old age pension should be reduced , raising it does nothing to bring home the message of the impending pension time bomb , it does the opposite

Quite right, it's dangerous nonsense. A typical populist move designed to win votes in the short term.

Will the workers in 30 years time be happy paying 70-80% income tax to keep state pensions at their current rates?
Will they fcuk.
If you're in your 20's -40's you should be assuming that the state pension will not exist by the time you reach retirement. It will certainly be reduced, available at a much later age and means tested.

Start a private pension now if you haven't already.

hairy_head

there are several lobby groups ( age action ireland , older and bolder etc ) who earn a living portraying the elderly as universally poverty stricken , its balderdash for the most part yet the media allows this narrative to completely run free , the elderly are not remotely poor in this country , its the young who are struggling and who face an uncertain future

hmmm

listermint wrote: »

Interested in how people can control how much risk the want to take on their investments if many schemes are mandated by the company you work for. i.e there is no choice.

If it's mandated by the company of course you can't - why ask a question you know the answer to?

If you have control you can choose the risk you want. Most people who have a work pension have a couple of funds to choose from.

We get it, you think pensions are a waste of time. That's exactly the type of attitude that worries me when I hear talk of Sinn Fein or the like getting into government, because those of us who have tried to be responsible will end up bailing out the rest.

anewme

sbsquarepants wrote: »

The government have already set a precedent by skimming pensions to pay for their stupidity - I just don't trust mine.
I have one but I started lateish, mid 30's & only pay in around 150 month (job used to match that, but now they only put in 10%) Can't remember the exact figure but my last statement said all going well, if I retire at 65 (in 23 years) i'll have the princely sum of €4,500/ year to live on. I just don't trust it enough to put anymore in though - it's already been robbed once, I very much doubt it will be the last time.

I think a lot of people have distrust on Pensions. will the tax free lump sum on retiring still be an option when I retire. What if the whole thing goes bang as has happened in the past just before I draw mine. I know they put your investments into cash 10 years before - but what if there is a huge hit 10 years and 3 months for example....it seems too much like pot luck.

Mine looks like it will pay out about 9 K pension after the lump sum but I wont solely be relying on that and will have other investments also.

A few of my friends, all decent paid people would be the same, mixing their options and not relying totally on the pension.

BrokenArrows

anewme wrote: »

I think a lot of people have distrust on Pensions. will the tax free lump sum on retiring still be an option when I retire. What if the whole thing goes bang as has happened in the past just before I draw mine. I know they put your investments into cash 10 years before - but what if there is a huge hit 10 years and 3 months for example....it seems too much like pot luck.

Mine looks like it will pay out about 9 K pension after the lump sum but I wont solely be relying on that and will have other investments also.

A few of my friends, all decent paid people would be the same, mixing their options and not relying totally on the pension.

The reality is that pensions are investments have have risks, however they are probably the best investment you are going to get outside of property, and as we all know property isnt even bullet proof.

Market crashes happen and yes they could impact the value of your pension however markets recover and so do the pension pots.

All those people who said their pensions were wiped out would have had them recover mostly in the following few years.

In reality you need to be particularly unlucky to require the pension money during a massive financial crisis.

And again in reality if you decide to save your money as cash in your own savings account you will be significantly worse off than a pension fund during a crash.

Musketeer4

More than your pathetic life!!:D

ongarboy

ongarboy wrote: »

I've heard more than one recent retiree who had 6 figure pension funds accumulated now finding that they only receive a paltry 90 or 100 euro a month from it and they're disgusted. Not sure how it all works out but that seems like a raw deal.............

If you had a €100k pension pot and retired buying a 4% annuity that would pay €2500/annum if retiring at NRA.

If they're getting €90/€100 month they either retired early or took a lump sum from the 6 figure pension fund.

anewme

BrokenArrows wrote: »

The reality is that pensions are investments have have risks, however they are probably the best investment you are going to get outside of property, and as we all know property isnt even bullet proof.

Market crashes happen and yes they could impact the value of your pension however markets recover and so do the pension pots.

All those people who said their pensions were wiped out would have had them recover mostly in the following few years.

In reality you need to be particularly unlucky to require the pension money during a massive financial crisis.

And again in reality if you decide to save your money as cash in your own savings account you will be significantly worse off than a pension fund during a crash.

these things tend to come in cycles...so there is a good chance that they will be wiped again and we cant change our ages at that point - so someone will lose at the time they are wiped.

My poor old boss in my last job had his pension wiped. Being self employed he did not have the money to fund it all through the years and only in the boom of the celtic tiger he was able to feed a lot of money into it in a short space of time. Unfortunately, because he was so underfunded his last 10 years did not go into cash as he needed some kind of growth. the arse fell out of the pension just as he was about to draw. Lost a lot of money.

I dont know, I think at least if you have some cash its a safety net- ok I have €300K or whatever irrespective of the markets.

I prefer to mix stuff - not to put all eggs in the one basket.

mahoganygas

Moving from equities to safe assets is not an on/off switch. It's a gradual flow which takes place over years as you approach retirement.

Yes equity markets are cyclical. But if you aren't willing to stake your fortune on at least some inherent risk, then pension funds are not for you. Just don't expect your cash savings to beat inflation.

listermint

listermint wrote: »

..........

I'm personally not sure what lefty government had to do with the crash in 2008 which wiped both by parents funds out to half their value.

It appears none of these folks who are maxing out their contributions and bingeing on free money are saying anything about this potential fly in the ointment?

What lefty government did that specifically?

Diversified funds would have recovered post 2008 in 5/6 years.

You avoid the fly in the ointment by having your fund in bonds etc rather than stocks as you approach retirement. If you are so close to retirment that you can't wait for the recovery or you don't have a diversified fund than the fly in the ointment is yourself for letting such a situation manifest

BrokenArrows

anewme wrote: »

these things tend to come in cycles...so there is a good chance that they will be wiped again and we cant change our ages at that point - so someone will lose at the time they are wiped.

My poor old boss in my last job had his pension wiped. Being self employed he did not have the money to fund it all through the years and only in the boom of the celtic tiger he was able to feed a lot of money into it in a short space of time. Unfortunately, because he was so underfunded his last 10 years did not go into cash as he needed some kind of growth. the arse fell out of the pension just as he was about to draw. Lost a lot of money.

I dont know, I think at least if you have some cash its a safety net- ok I have €300K or whatever irrespective of the markets.

I prefer to mix stuff - not to put all eggs in the one basket.

True but with any investment you shouldnt just stick your money into it and hope for the best. You need to have some idea what your fund is invested in and whether thats a good idea with the current economy.

If your pension is on track and you are planning to retire in less than 10 years you should change your fund into less risky investments which will hold up during an economic problem.
Whether that is cash, or property, or something else.

My pension account gives me the flexibility to move money into different things.
I can put some in cash, other in gold, property, equities, bonds etc.
So i can spread the risks.

IrishZeus

Basic question - do you pay tax on your pension when you start drawing it?

i.e If I built up to a yearly pension of €50,000/year + €12000 from the state - would I pay tax on the €50,000 when I start drawing it?

BrokenArrows

IrishZeus wrote: »

Basic question - do you pay tax on your pension when you start drawing it?

i.e If I built up to a yearly pension of €50,000/year + €12000 from the state - would I pay tax on the €50,000 when I start drawing it?

Yes you will pay income tax as if you had a job.

OldMrBrennan83

This post has been deleted.

hmmm

anewme wrote: »

My poor old boss in my last job had his pension wiped.

How could he have had it "wiped" - he lost 100% of his pension? What was he doing, investing it all in Lehmans?

Patww79

Patww79 wrote: »

This post has been deleted.

It's probably after recovering to whatever high it was ever at unless it was invested mainly in financial stuff......

MeatTwoVeg

hmmm wrote:

How could he have had it "wiped" - he lost 100% of his pension? What was he doing, investing it all in Lehmans?

I think at it's lowest, my pension was worth slightly less than the contributions I'd made to it over the previous 15years.
All the gains were wiped.

BrokenArrows

Patww79 wrote: »

This post has been deleted.

Unlikely.

The pre boom fund has likely recovered to more than it was worth before crash. So you probably have a substantial amount in it.

The One year of contributions is still a decent amount of money.

Its not hard to find out where your pensions are.

First thing to do would be to call the companies that you used to work for. They should be able to tell you who their pension provider is. You can then call the pension provider and sort it out and get details on how to claim and what its worth etc.

If contacting the employers is no help or they went out of business then there are a few companies out there that can track down your pensions. Just google them.

Alternatively you can just call the few major pension providers in ireland and ask them directly.

BrokenArrows

MeatTwoVeg wrote: »

I think at it's lowest, my pension was worth slightly less than the contributions I'd made to it over the previous 15years.
All the gains were wiped.

All the gains might have been wiped but you still have the contributions which would have then been able to recover once the market picked up again.

You also forget that your contributions were tax free so the money in there is actually between 40-60% higher than if you tried to save that amount yourself outside of a pension fund.

OldMrBrennan83

This post has been deleted.

draiochtanois

This post has been deleted.

BrokenArrows

Patww79 wrote: »

This post has been deleted.

The existing staff might be gone but they probably still use the same pension provider today. So they should be able to tell you what the current provider is.

The fund doesnt necessarily disappear with the company. Just call the main providers you can find with google. Irish Life, New Ireland, Standard Life

BrokenArrows

draiochtanois wrote: »

This post has been deleted.

Ya, i cant edit the thread anymore.

Geuze

hairy_head wrote: »

there are several lobby groups ( age action ireland , older and bolder etc ) who earn a living portraying the elderly as universally poverty stricken , its balderdash for the most part yet the media allows this narrative to completely run free , the elderly are not remotely poor in this country , its the young who are struggling and who face an uncertain future

Indeed.

My retired parents pay a staggeringly low direct tax of under 10% on 50k income.

They get:

• two travel passes
• two med cards
• 35 pm off the elec bill
• free TV licence

I don't think any country is as generous.

Geuze

IrishZeus wrote: »

Basic question - do you pay tax on your pension when you start drawing it?

i.e If I built up to a yearly pension of €50,000/year + €12000 from the state - would I pay tax on the €50,000 when I start drawing it?

Yes.

However, we in Ireland are wonderfully generous to our over 65s.

So:

• no PRSI if over 65
• no income tax at all if income under 18k single / 36k married
• extra Age tax credit of 245 single / 490 married
• less USC if you have a med card
• much higher threshold for med card if over 70, allowing most people to qualify

The J Stands for Jay

Geuze wrote: »

Indeed.

My retired parents pay a staggeringly low direct tax of under 10% on 50k income.

They get:

• two travel passes
• two med cards
• 35 pm off the elec bill
• free TV licence

I don't think any country is as generous.

And they're promising to kick off if they don't get an extra fiver a week in the budget. Using 2011 census figures, that will cost €166million a year.

anewme

hmmm wrote: »

How could he have had it "wiped" - he lost 100% of his pension? What was he doing, investing it all in Lehmans?

I dont know.....I know he was left with sod all after paying loads into it over quite a short period of time. the reason for such big losses to him was that he had not changed to the safer strategy heading towards retirement that people would usually do. so was left with no recovery time and a crap pot.

This was about 10-12 years ago.

Moo Moo Land

CruelCoin wrote: »

There is the mother of all cluster**** trains rolling down the lines...

The pension bill is going to balloon and there isn't a sensible plan anywhere on how we're going to pay for it, especially seeing as how the pension pots are in deficit right now...

Problem is that the current group of cowardly politicians will have gorged on their fat pensions by then.

mad muffin

Two leaves and a pine cone.

sbsquarepants

Elessar wrote: »

Bloody hell. To get a 30k pension (which includes the state pension) I'll need to drop another €600 per month into it :eek:

Much the same - to retire at 65 (23 years away) and have a pension of 25k on top of whatever the state might throw at me. I need to pay in an extra 690 a month.

Not a fúcking hope in hell. That comes to additional payments of 190k. Even if I had it, I just wouldn't trust it with that sort of money. I'd rather put it in the bank and take my chances.

MeatTwoVeg

sbsquarepants wrote:

Much the same - to retire at 65 (23 years away) and have a pension of 25k on top of whatever the state might throw at me. I need to pay in an extra 690 a month.

You'll notice in all the talks regarding public servant's pay, that the Unions never mention the generous DB pensions they get when comparing their salaries to those in the private sector.
The amount of money private sector workers need to contribute to even have a hope of getting near the same level as their contemporaries in the public service is eye watering.

Guards can retire on a full pension at 55!

Work out how much you'd need to contribute to a pension scheme to be able to do this and bear it in mind when you hear their spokespeople bleating about their low salaries.

cbyrd

What I would be worried about with a pension is, when it matures and say I have a million euro.. how much in 20 odd years will paper currency have devalued?

I remember my father paying into a pension for years (he was self-employed) he was assured that this would be worth IR250 per week on maturity. By the time it did mature, the ass had fallen out of it and he was left with .51c per week.
I wouldn't trust a financial institution with my money. Too many people get fried by them.

Also with my ex husband'a pension, started in his 20's, he had almost E34,000 wiped off it in the crash.. it'd be worth more had we stuffed the money under the mattress.

anewme

cbyrd wrote: »

What I would be worried about with a pension is, when it matures and say I have a million euro.. how much in 20 odd years will paper currency have devalued?

I remember my father paying into a pension for years (he was self-employed) he was assured that this would be worth IR250 per week on maturity. By the time it did mature, the ass had fallen out of it and he was left with .51c per week.
I wouldn't trust a financial institution with my money. Too many people get fried by them.

Also with my ex husband'a pension, started in his 20's, he had almost E34,000 wiped off it in the crash.. it'd be worth more had we stuffed the money under the mattress.

Thats the same type of thing that happened to my old boss .....they say investments can fall as well as rise.

Its scary seeing 34K wiped off your investment - but they say they bounce back.

when you read stories like this, you can understand why people have a distrust of pensions....all the projections are great and then the reality is different.

Winterlong

cbyrd wrote: »

What I would be worried about with a pension is, when it matures and say I have a million euro.. how much in 20 odd years will paper currency have devalued?

I remember my father paying into a pension for years (he was self-employed) he was assured that this would be worth IR250 per week on maturity. By the time it did mature, the ass had fallen out of it and he was left with .51c per week.
I wouldn't trust a financial institution with my money. Too many people get fried by them.

Also with my ex husband'a pension, started in his 20's, he had almost E34,000 wiped off it in the crash.. it'd be worth more had we stuffed the money under the mattress.

With many pension plans YOU decide how it gets invested and you can change those investments when you want to.
So when the economy looks shaky you move to safe harbour investments. When it is on the up you move to higher risk investments.

I have had a pension for 20 odd years and I too would not trust a financial institution wiht my pension, that is why I monitor it closely and move the money around from safe to higher risk depending on the state of the economy.
No fund ever goes to zero over night unless you have been really stupid/unlucky (Lehmens shares). So when things do look dodgy there is time to move to very low risk funds.

bappelbe

Winterlong wrote: »

With many pension plans YOU decide how it gets invested and you can change those investments when you want to.
So when the economy looks shaky you move to safe harbour investments. When it is on the up you move to higher risk investments.

The problem with this is that most people pull out of funds at the wrong time.
I read that the biggest month ever for withdrawal of money from Irish pension (stock based) funds was March 2009 - the very bottom for the stock markets, when we should have being putting it all in to the funds to maximise returns. Hindsight is great:)

I have met 2 people who claim that their pension funds went to zero during the crash, when I ask for details as to how this happened neither of them would give me any info

cbyrd

cbyrd wrote: »

What I would be worried about with a pension is, when it matures and say I have a million euro.. how much in 20 odd years will paper currency have devalued?

I remember my father paying into a pension for years (he was self-employed) he was assured that this would be worth IR250 per week on maturity. By the time it did mature, the ass had fallen out of it and he was left with .51c per week.
I wouldn't trust a financial institution with my money. Too many people get fried by them.

Also with my ex husband'a pension, started in his 20's, he had almost E34,000 wiped off it in the crash.. it'd be worth more had we stuffed the money under the mattress.

Stuffing the money under the mattress won't keep up with inflation which was your question from the first paragraph. At the moment i dont think a savings account would either.
The idea is to at least invest in something that will outperform it, maybe bonds
I think a lot of people who had lost money had invested it in equities

Of course you then have stuff like fund management charges or whatever so there's a number of considerations. Just that those things are in there.

seamus

bluewolf wrote: »

I think a lot of people who had lost money had invested it in equities

Yeah, a lot of pension funds were pushing older people to move all or part of their pension into stocks and property on the basis that it was performing really well and would give them a huge return into their retirement. When the economy collapsed, their pensions dropped in value, which is a disaster for anyone who's within a decade of retirement.

There's a reason why older people are advised to put their pension funds into stable/safe funds - so even if the funds aren't performing well, they at least aren't dropping in real value and will still have their pension when they retire.

Saipanne

I'm 35, I think I'm at 50% of gross annual salary. I didn't start until I was 30.

billyhead

Winterlong wrote: »

With many pension plans YOU decide how it gets invested and you can change those investments when you want to.
So when the economy looks shaky you move to safe harbour investments. When it is on the up you move to higher risk investments.

I have had a pension for 20 odd years and I too would not trust a financial institution wiht my pension, that is why I monitor it closely and move the money around from safe to higher risk depending on the state of the economy.
No fund ever goes to zero over night unless you have been really stupid/unlucky (Lehmens shares). So when things do look dodgy there is time to move to very low risk funds.

Are you saying the like sof an AVC plan managed by a financial institution is not advisable?

recipio

If you save 500k you can look forward to about 15k per year -before tax. You won't change the car with that. Granted you get a 25% lump sum. Frankly I'd prefer the 500k. The money is forever out of reach ( unless you want to pay the Government tax at 40% ) and you could lose money in a stock crash as I did in 2008. Just save the money and keep control of it.:rolleyes:

Xaniaj

Have about 75% of one year in the pension but upped my contribution to 12% (from 4) this year, employer contributes 10%. I'm 33 and ideally I'd like to retire early so I'll have to up it to the max 20% I'd say.

Outside of my pension, I also invest in index funds and some equities which is currently at 50% of my salary.

Giacomo McGubbin

Geuze wrote: »

Yes.

However, we in Ireland are wonderfully generous to our over 65s.

So:

• no PRSI if over 65
• no income tax at all if income under 18k single / 36k married
• extra Age tax credit of 245 single / 490 married
• less USC if you have a med card
• much higher threshold for med card if over 70, allowing most people to qualify

So, after paying taxes upon taxes all your working life, would you rather that was all done away with when you get to 68+ ?

Or, as a Senior Citizen, do you think it's your turn to live out what remains of your life with a little bit of decency ?