how much of a pension should you have come retirement age

Geuze

anewme wrote: »

Just conscious of not saving too much now, as I'm not willing to leave it to govt when I pass on.

Why do you think the Govt get your estate?

Your next of kin will inherit your estate.

Mortelaro

Jim2007 wrote: »

Well I guess if all you want to do when you retire is sit at home everyday looking out the window, then you be just fine on a very reduced income....

But that industry guff, you dismiss so easily is base on looking on the lifestyles of people in early retirement and most of them are in good health and are likely to be for sometime and they don't want to stay home, they are travelling, taking courses, visiting friends abroad and do things that interest them. They don't stop spending, in fact many spend even more. My father and mother never left the West of Ireland until the day the gave up farming... after that you'd be hard pressed to find them at home for any extended period over the next ten years - they went all over Europe and beyond.... don't assume everyone wants to stay at home and live within a very limited income like you do.

You're exaggerating
Kids from birth to graduation are very expensive
A mortgage ditto
Staying at home all the time on a very reduced income is exaggeration
What commission led policy sellers want you to believe is exaggerated for their benefit

If you're retired and think you won't have enough to live,love and travel ,you'd be falling for the industry guff which if you've a private pension on top of your state pension of even 10k a year you could do all the travelling you want and socialising
If you need more,for example if your health deteriorates you've the option of an equity release too
It's no use to you when you're dead
You can fly to most European cities most of the year for under a 100 euros btw
Not to mention decently priced package holidays

ANXIOUS

Mortelaro wrote: »

You're exaggerating
Kids from birth to graduation are very expensive
A mortgage ditto
Staying at home all the time on a very reduced income is exaggeration
What commission led policy sellers want you to believe is exaggerated for their benefit

If you're retired and think you won't have enough to live,love and travel ,you'd be falling for the industry guff which if you've a private pension on top of your state pension of even 10k a year you could do all the travelling you want and socialising
If you need more,for example if your health deteriorates you've the option of an equity release too
It's no use to you when you're dead
You can fly to most European cities most of the year for under a 100 euros btw
Not to mention decently priced package holidays

I always find that this topic brings out replies across the full spectrum.

Some people get very defensive of what they think they will need and others get very boastful.

The answer I would give anyone is, sit down and think about the lifestyle that you'd like add it up and the increase for inflation.

To correct this post, an equity release wouldn't be available in retirement.

anewme

Geuze wrote: »

Why do you think the Govt get your estate?

Your next of kin will inherit your estate.

The Govt gets it because of the way single people are penalised due to Inheritance Tax rates.

Someone might be slagging saying leave it to the dog's home. But I am being deadly serious. Would rather a charity gets it than the Govt. I've already paid enough tax on it.

tomwaits48

I'm 34 and have a pot built up of €90k, current projected value if I keep my the current payments of €1,700 per month at 68 is €1.2m. Here's hoping that maintains.

anewme

tomwaits48 wrote: »

I'm 34 and have a pot built up of €90k, current projected value if I keep my the current payments of €1,700 per month at 68 is €1.2m. Here's hoping that maintains.

Fair Play.

Liam D Ferguson

anewme wrote: »

The Govt gets it because of the way single people are penalised due to Inheritance Tax rates.

Someone might be slagging saying leave it to the dog's home. But I am being deadly serious. Would rather a charity gets it than the Govt. I've already paid enough tax on it.

While you're alive you can give €3,000 per year to anyone you like with no Inheritance Tax, as an advance on their inheritance. After you're dead, you can give €32,500 each to any nephews, nieces, siblings, €16,250 each to any other people and the balance to charity.

Like you I wouldn't be keen on more tax being paid after I'm dead on money or assets that I already paid tax when accumulating them.

Salary Negotiator

tomwaits48 wrote: »

I'm 34 and have a pot built up of €90k, current projected value if I keep my the current payments of €1,700 per month at 68 is €1.2m. Here's hoping that maintains.

At those monthly additions your projected value seems quite low.

Heebie

anewme wrote:

Would rather a charity gets it than the Govt. I've already paid enough tax on it.

If it's in a pension, you've paid no tax on it yet.
What you put in your pension is tax deferred. You don't pay tax on it until you take it out.
I pay a lot less in taxes, because of what I'm putting into my pension. When I draw it down from the pension, I should be paying a lower rate of tax on it.

tomwaits48

Salary Negotiator wrote: »

At those monthly additions your projected value seems quite low.

Really? That's what the Irish Life Calculator on my pension plan log in just spat out at me.

Age 58


Total Payments: €549,842
Projected Value @4.40% P.A. : €845,926

Age 63

Total Payments: €651,842
Projected Value @4.40% P.A. : €1,071,020

Age 68

Total Payments: €753,842
Projected Value @4.40% P.A. : €1,266,111

Jim2007

Mortelaro wrote: »

You're exaggerating
Kids from birth to graduation are very expensive
A mortgage ditto
Staying at home all the time on a very reduced income is exaggeration
What commission led policy sellers want you to believe is exaggerated for their benefit

If you're retired and think you won't have enough to live,love and travel ,you'd be falling for the industry guff which if you've a private pension on top of your state pension of even 10k a year you could do all the travelling you want and socialising
If you need more,for example if your health deteriorates you've the option of an equity release too
It's no use to you when you're dead
You can fly to most European cities most of the year for under a 100 euros btw
Not to mention decently priced package holidays

Your finances is not a great place to have a hobby horse....

Unless you are going to retire within the next decade or so, expecting that a state pension will cover you is just not realistic. The demographics and the stats tell us this. Ireland is going to have to go through the exact same pension reform process as is going on all over Europe, there is not escaping that because the pay-as-you system cannot work with an ageing population. That means that the emphasis will fall back on the so called 2nd and 3rd pillars - private pensions and pension savings. Now if you don't want to deal with that and claim it's an exaggeration, that is your choice.

There are plenty of studies out there at suggest that couples need about 60% - 70% of their current income to enjoy retirement and cover any additional costs. And again if you don't want to do the math and dismiss it as an exaggeration, that is your choice.

As you go through life, there are may things that could happen, that will prevent you from follow the typical path to retirement. If you don't want to face up to such possibilities and ensure that you are covered, that is up to you.

At the end of the day it is up to you, how you want to provide for your future, but everything we know now, suggest that relying on the state as major source of financing your retirement is not going to work out very well.

anewme

Heebie wrote: »

If it's in a pension, you've paid no tax on it yet.
What you put in your pension is tax deferred. You don't pay tax on it until you take it out.
I pay a lot less in taxes, because of what I'm putting into my pension. When I draw it down from the pension, I should be paying a lower rate of tax on it.

Sorry if Im confusing things. Im saying how much would you need to live in retirement as well as your pension, for example lump sum and savings.

ixoy

tomwaits48 wrote: »

I'm 34 and have a pot built up of €90k, current projected value if I keep my the current payments of €1,700 per month at 68 is €1.2m. Here's hoping that maintains.

That's a huge amount. Is this in lieu of a standard savings account? Is much of this being matched by your company?

tomwaits48

ixoy wrote: »

That's a huge amount. Is this in lieu of a standard savings account? Is much of this being matched by your company?

Yes, the company pays 50%, so I kick up €850 myself. I keep a modest savings/investment account with Mintos but the majority of any spare cash goes to the pension, the tax incentive is very attractive. I spend the rest I have then each month then guilt free. I am also assuming there will be no state pension when I retire.

Mortelaro

Jim2007 wrote: »

Your finances is not a great place to have a hobby horse....

Unless you are going to retire within the next decade or so, expecting that a state pension will cover you is just not realistic. The demographics and the stats tell us this. Ireland is going to have to go through the exact same pension reform process as is going on all over Europe, there is not escaping that because the pay-as-you system cannot work with an ageing population. That means that the emphasis will fall back on the so called 2nd and 3rd pillars - private pensions and pension savings. Now if you don't want to deal with that and claim it's an exaggeration, that is your choice.

There are plenty of studies out there at suggest that couples need about 60% - 70% of their current income to enjoy retirement and cover any additional costs. And again if you don't want to do the math and dismiss it as an exaggeration, that is your choice.

As you go through life, there are may things that could happen, that will prevent you from follow the typical path to retirement. If you don't want to face up to such possibilities and ensure that you are covered, that is up to you.

At the end of the day it is up to you, how you want to provide for your future, but everything we know now, suggest that relying on the state as major source of financing your retirement is not going to work out very well.

I'm talking about a personal pension fund
Not income protection or sickness policies
I do think everyone should consider adequate cover there
However if you are healthy to retirement, you wont have kids to support or a mortgage
Both are huge drains gone

If you're planning on increasing your lifestyle spend after retirement by 2 or 3 grand a month or more,then by all means go with the industry guff
Otherwise my opinion is save prudently what you'd need as opposed to what people interested in commission who don't know you from Adam think you'll need

Geuze

anewme wrote: »

The Govt gets it because of the way single people are penalised due to Inheritance Tax rates.

Someone might be slagging saying leave it to the dog's home. But I am being deadly serious. Would rather a charity gets it than the Govt. I've already paid enough tax on it.

As you won't be paying any CAT due, why worry about it?

anewme

Geuze wrote: »

As you won't be paying any CAT due, why worry about it?

Because it's mine. My home, my money.

That I've built up over 50 years, by myself.

I've paid enough tax on it already, I want to leave it to someone who can use it.

The Govt. have got enough from me already, and then some. I'd rather blow it in Vegas on Red or Black, if it comes to it, than let them fleece me again. Charity seems the right way to go.

anewme

Liam D Ferguson wrote: »

While you're alive you can give €3,000 per year to anyone you like with no Inheritance Tax, as an advance on their inheritance. After you're dead, you can give €32,500 each to any nephews, nieces, siblings, €16,250 each to any other people and the balance to charity.

Like you I wouldn't be keen on more tax being paid after I'm dead on money or assets that I already paid tax when accumulating them.

Our family circle is small, so most of what I leave will be going to my 2 nieces. So if you take out €32,500 each and the Estate (inc house) in total may be worth €600-€700K, that's a lot of tax to pay.

ixoy

tomwaits48 wrote: »

Yes, the company pays 50%, so I kick up €850 myself.

That's an excellent return. What sort of company does that? I get 11% matched and that's only after turning 40.

I keep a modest savings/investment account with Mintos but the majority of any spare cash goes to the pension, the tax incentive is very attractive.

On the tax incentive.. When drawing down, you'll still pay tax so is this not postponing it merely?

I'm focused I think on paying the mortgage off earlier as it would seem a wiser return for any contribution not being matched.

171170

Liam D Ferguson wrote: »

Look at your current income. Subtract all the expenses you won't have when you retire, e.g. mortgage, car loan, expenses for children, commuting costs. Then you have a rough guide to how much income you'll need when you retire. Subtract €12,000 for the State Pension. What's left is what you'll need to come up with from your private pension. Very rough rule of thumb - target a fund of 20 or 25 x the annual pension you want.

If you already have a pension fund, then your broker should be able to do this calculation for you, to take into account the existing fund etc.

Wouldn't it be wiser to subtract ~€10,000 for the state pension, bearing in mind that it's likely to be taxable for those people who also have a private pension?

171170

pwurple wrote: »

Fuel allowance is means tested. If you have any contributions to a pension you basically don’t qualify.

The Household Benefits package isn't! And it provides €420 of free electricity annually.

pwurple

171170 wrote: »

The Household Benefits package isn't! And it provides €420 of free electricity annually.

Ah, I know what you mean now. That is available to the over 70's. My parents are in their early 60's so not available to them.

I hope to be retired by 58, so won't be available to me either.

LuasSimon

Will it be the case that the State Pension will only be paid to those who were on welfare all their lives ( ie never worked) in 15 years time .....and those with average private pensions ie 15-25K wont be any better off for all their saving into a pension (450K - 750K )??

tomwaits48

ixoy wrote: »

That's an excellent return. What sort of company does that? I get 11% matched and that's only after turning 40.


On the tax incentive.. When drawing down, you'll still pay tax so is this not postponing it merely?

I'm focused I think on paying the mortgage off earlier as it would seem a wiser return for any contribution not being matched.

Just to be clear, I should have said "the company pays half" e.g they kick in 10% to match my 10%....50% would be too good to be true :pac:

AndrewJRenko

anewme wrote: »

Because it's mine. My home, my money.

That I've built up over 50 years, by myself.

I've paid enough tax on it already, I want to leave it to someone who can use it.

The Govt. have got enough from me already, and then some. I'd rather blow it in Vegas on Red or Black, if it comes to it, than let them fleece me again. Charity seems the right way to go.

Low or no inheritance tax is a great way of preserving intergenerational inequality - so the rich stay rich and the poor stay poor.

171170

pwurple wrote: »

Ah, I know what you mean now. That is available to the over 70's. My parents are in their early 60's so not available to them.

I hope to be retired by 58, so won't be available to me either.

It's available to many younger people too!

Scroll down to Rules and have a look!

https://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/extra_social_welfare_benefits/household_benefits_package.html

171170

anewme wrote: »

Because it's mine. My home, my money.

That I've built up over 50 years, by myself.

I've paid enough tax on it already, I want to leave it to someone who can use it.

The Govt. have got enough from me already, and then some. I'd rather blow it in Vegas on Red or Black, if it comes to it, than let them fleece me again. Charity seems the right way to go.

Why not marry a young one and impregnate her? I can introduce you to some fertile young fillies, if you're not too choosy! That way, you'll have someone to leave your vast estate to!

anewme

171170 wrote: »

Why not marry a young one and impregnate her? I can introduce you to some fertile young fillies, if you're not too choosy! That way, you'll have someone to leave your vast estate to!

LOL, I am a woman and not interested in children. Nor fertile young fillies or stallions either.

Not sure about vast Estate, but I'm fairly proud of what I've achieved. Hence the question, how much do you need in retirement.

anewme

AndrewJRenko wrote: »

Low or no inheritance tax is a great way of preserving intergenerational inequality - so the rich stay rich and the poor stay poor.

Or rather, like everything else, the people in the middle pay everything.

Not rich enough to afford to pay it and not feel it, nor poor enough to have nothing.

171170

anewme wrote: »

LOL, I am a woman and not interested in children. Nor fertile young fillies or stallions either.

Not sure about vast Estate, but I'm fairly proud of what I've achieved. Hence the question, how much do you need in retirement.

Good on ya, ma'am!

I'm not particularly interested in kids either, but the missus took advantage of my soft nature and now we have a couple of them! :eek:

Would you be interested in leaving your vast fortune to them? I could let you adopt one for a small consideration.