Whats your private pension fund worth?

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 ?

FURET

cbyrd wrote: »

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.

I highly doubt that unless he was invested in some total bs. That crash was a godsend to anyone building a retirement pot. The US stock market for example has grown 230% since the low point of that crash.

People are terrified of stock market crashes when the reality is that they should be welcomed by anyone who isn't retired.

To the fellow who said he monitors the economy and moves to safe havens during troubled times -- that's one of the worst strategies imaginable.

ytpe2r5bxkn0c1

FURET wrote: »

People are terrified of stock market crashes when the reality is that they should be welcomed by anyone who isn't retired.

What retired person, with more than 2 brain cells, would have any portion of their pension fund in stocks? Nobody.

Approaching retirement age you move to cash and low risk options.

worded

Didn't the financial ratings like standard and poors people give AAA ratings to dodgey groups for 20 mortgages so pension funds could invest in these?

Lots of pension funds are in the negative

It's a big scam in a lot of cases, the brokers are the only winners

ytpe2r5bxkn0c1

worded wrote: »

Didn't the financial ratings like standard and poors people give AAA ratings to dodgey groups for 20 mortgages so pension funds could invest in these?

Lots of pension funds are in the negative

It's a big scam in a lot of cases, the brokers are the only winners

There are many thousands of people on good private pensions, having retired in their 50s, who wouldn't agree with you there. And remember that many negatives are actuarial evaluations based on the funds closing entirely. In practice the most funds are sound.

FURET

Rory Victorious Sandalwood wrote: »

What retired person, with more than 2 brain cells, would have any portion of their pension fund in stocks? Nobody.

Approaching retirement age you move to cash and low risk options.

I did say anyone who isn't retired.

When in my 60s and beyond I plan to keep 35-40% of my portfolio in stocks, the rest in bonds.

Winterlong

billyhead wrote: »

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

No, what I am saying is that people should make a bit of effort to understand how pensions work, what the options are, and go for one that they are comfortable with.
This is a million times better than 'I dont trust banks so will not have a pension'.

Johngoose

ChikiChiki wrote: »

I'm 29 and have about 35k in the fund. I stopped contributing a few months back on leaving a job but must start again early next year. Unemployed at the minute and I'd love to get at it as I've literally €12.83 to my name after counting this morning. :-)

Fair play hang on in there.Ive had hairy moments myself in my life, but thankfully back on track.You will get through this.

ytpe2r5bxkn0c1

FURET wrote: »

I did say anyone who isn't retired.

When in my 60s and beyond I plan to keep 35-40% of my portfolio in stocks, the rest in bonds.

Thus you said that anybody retired should not welcome stock market crashes; but they aren't, or should not be, affected by them.

35% in stocks when over 60 years of age is madness in my opinion.

Eamondomc

Rory Victorious Sandalwood wrote: »

Thus you said that anybody retired should not welcome stock market crashes; but they aren't, or should not be, affected by them.

35% in stocks when over 60 years of age is madness in my opinion.

I ve just gotten my annual pension statement from Irish life.
40 k
I haven't contributing to it for 3 years now.
The statement said, "cash in value" 40k

Why would they word it like that?

mahoganygas

Eamondomc wrote:

Why would they word it like that?

That's it's value IF you were to retire today. But it's currently tied up in investments which are valued at 40k.
When you retire their value could be different.

There isn't 40k cash sitting in your pension fund.