how much of a pension should you have come retirement age

ToxicPaddy

Jeez reading this thread has me wondering.

I currently have about 300k in mine, I'm a 44yo and putting in 14k a year currently (combination of my employer contributions and mine) but planning on increasing it to just under €18k a year next year.

What calculator are you guys using to figure out what the estimated lump sum will be in the end?

AndrewJRenko

Heebie wrote: »

I want a job where you work!
Most companies only match to 5%
Really generous ones go as high as 25% after 30 years of service or so.
50% would be incredible!

Just to be clear - 50% of what? I don't think he's saying that the employer is putting 50% of salary in the pension fund, on top of salary.

anewme wrote: »

What I want is for the exemptions to be fair and to factor in not everyone has children.

Calling me or my family freeloaders is an insult to someone who has worked 50 years. and saying that my Estate deserves to be taxed 90% is a dick thing to say. this is not after hours, so I would not expect that abusive quality of answer.

Whether you like it or not, people will seek options to pass their hard earned wealth whilst incurring minimal tax bills. That does not make either the donor or recipient a freeloader. That's what I'm asking for here, thanks to those re advice on Trusts, passing now etc.

There is a good reason for the exemption for children, the reasonable expectation that parents will and generally should provide for their children.


You can seek all the options you like, but you're a long way making any rational argument for why the current tax laws should change.


You might want to check out nursing home prices before you go too far down the road of planning your inheritances.

anewme

AndrewJRenko wrote: »

You might want to check out nursing home prices before you go too far down the road of planning your inheritances.

This is a patronising comment.

My Dad is in a home with dementia for the past 3 years, and given I'm his carer, dont try to explain anything to me about nursing homes. I know how it all works first hand and visited 20 nursing homes. Given our family history, my wishes in relation to this are already well documented within my family , not that it's any of your business.

This thread or forum is not about nursing homes, so I'm not sure what you are trying to get at. I am just as entitled as the next person to plan my inheritance.

AndrewJRenko

anewme wrote: »

This thread or forum is not about nursing homes, so I'm not sure what you are trying to get at.

I'm trying to get at the point that a significant proportion of your own assets and wealth may well be dissipated to cover the costs of your own care before your death. Don't count your chickens and all that.

anewme

AndrewJRenko wrote: »

I'm trying to get at the point that a significant proportion of your own assets and wealth may well be dissipated to cover the costs of your own care before your death. Don't count your chickens and all that.

You seem to be talking at me as if I'm an idiot.

Theres a max that can be taken under the fair deal scheme. Im an expert in it. I've just been through it.

0lddog

A significant percentage of you all wont live to be needing a pension

Accidents, medical issues, recreational activities, addiction ... so many ways a life can end

Enjoy life while you can.

0lddog

anewme wrote: »

You seem to be talking at me as if I'm an idiot..

Thats just his style, its not aimed at you

Tar.Aldarion

AndrewJRenko wrote: »

Just to be clear - 50% of what? I don't think he's saying that the employer is putting 50% of salary in the pension fund, on top of salary.

Yes, he said they match 10%, so he would be earning 8500 pm,over 100k per year basic.

AndrewJRenko

anewme wrote: »

You seem to be talking at me as if I'm an idiot.

Theres a max that can be taken under the fair deal scheme. Im an expert in it. I've just been through it.

Assuming that the Fair Deal scheme will exist, or will have the same rules by the time you come to need it would not be a safe assumption.

anewme

AndrewJRenko wrote: »

Assuming that the Fair Deal scheme will exist, or will have the same rules by the time you come to need it would not be a safe assumption.

We can only go on and react to the information we have to hand now and apply them to our own circumstances as they are.

So that's what I'm doing.

AndrewJRenko

anewme wrote: »

We can only go on and react to the information we have to hand now and apply them to our own circumstances as they are.

So that's what I'm doing.

Good luck with that, as they say.

deisedevil

Reading this and the recent salary thread wouldn't half get you down. Here I was thinking I was doing grand but according to this, despite working my ass off, my reward will be living in pure poverty once my work days are over.

king size mars bar

deisedevil wrote: »

Reading this and the recent salary thread wouldn't half get you down. Here I was thinking I was doing grand but according to this, despite working my ass off, my reward will be living in pure poverty once my work days are over.

Like yourself I'm working hard, paying my bills and not a whole lot else. 40 now and no pension or savings what so ever this is Ireland now live week to week even day to day. Can't get my head around how much some people mange to save so much.

KyussB

anewme wrote: »

What I want is for the exemptions to be fair and to factor in not everyone has children.

Calling me or my family freeloaders is an insult to someone who has worked 50 years. and saying that my Estate deserves to be taxed 90% is a dick thing to say. this is not after hours, so I would not expect that abusive quality of answer.

Whether you like it or not, people will seek options to pass their hard earned wealth whilst incurring minimal tax bills. That does not make either the donor or recipient a freeloader. That's what I'm asking for here, thanks to those re advice on Trusts, passing now etc.

If everyone else in the country is giving them a giant tax break, then yea the people you pass the money to would be freeloaders - not the donor, the receiver - forcing everyone else to take up the burden of the tax they are supposed to pay.

Nobody is entitled to giant tax free lump sums. People have to earn their money - and if they benefit from a windfall, should consider themselves lucky to get a single cent they didn't earn.

pwurple

KyussB wrote: »

Nobody is entitled to giant tax free lump sums. People have to earn their money - and if they benefit from a windfall, should consider themselves lucky to get a single cent they didn't earn.

Except children and spouses. Which I think is exactly their point. They may consider their favourite nieces to be as close as children, depends on their relationship .

@Anewme, you can pick a younger friend to marry. Any gender you like.

KyussB

No, especially not excepting children - intergeneratonal wealth is one of the biggest social/economic/political problems that exists - spouses is a more ambiguous one (usable as a method of tax evasion).

soap1978

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

Heebie

You could be putting small amounts away. The further you are from retirement, the more that money will grow. The company you work for will probably match your contribution up to 5% at a minimum... That's pretty standard. So if you put a tenner in from every check, you get 20... Do by not doing so, you're throwing away part of your pay, effectively.
If you can put enough away, you may actually reduce your tax bracket and end up taking home more money instead of less.
I don't know my exact figures right now, but I know in the past I was putting nearly 300/month into my pension, and it only made a difference in my take home pay of about 100/month due to the tax savings. So I was getting 300 savings, but it only "cost" me 100 to do so. I was able to manage that small sacrifice so that I will have some private income when I retire.
(Now I'm putting away a lot more monthly than I was then, but the amount my take home pay "goes down" because of it is still a lot less than what I get out of it.)
Every little bit helps.

Heebie

soap1978 wrote:

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

If you can afford to pay more, it's often a good idea. There's a maximum allowed by law as a percentage of your gross pay. The more you put in, the less tax you pay, and the more you end up with earning interest for you.
If your company pays in more than you do, that's awesome... If they'll pay even more of you pay more... that's free money. (I don't imagine they'd go up from that 11%. That's awesome)
The company that runs your pension probably has tools online that will show you what to expect for income.
Both of mine (I have a personal retirement account and my current company pension) have tools that tell me what I should expect to need at a minimum for income, how much to expect from my pension for an income, and how much to expect from a public pension.
The estimate of what I'll need is probably based on a percentage of my current income, with the intention that I could maintain a similar lifestyle.

I'm definitely an advocate of taking every penny of income I can get my employer to give me. (Minimum amount to put into the pension is the maximum the company will match)

I'm also an advocate of trying to put in the maximum allowed by law, because it reduces my tax burden, and can than earn me more money by being in interest bearing funds, rather than a savings/current account that effectively pays me nothing at all... Interest earned is again effectively "free money" that'll help me not be a pauper later.

I could be living "very well" now with a bigger apartment, bigger newer telly etc etc etc... I'd much rather make sure that the public pension and some supplements from social welfare aren't all I have when I get old.

FastFullBack

soap1978 wrote: »

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

Your very young in pension terms with probably at least 25 years until you drawdown. You should be invested in high risk equities. It will go up, it will go down but over the long term it always goes up.

Ulysses Gaze

soap1978 wrote: »

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

Look at an AVC. I have one currently that runs alongside my 6% contributory pension.

Even a small extra contribution monthly now will all add up.

AndrewJRenko

soap1978 wrote: »

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

Will the company pay more if you pay more? If so, it's free money that you'd be crazy to leave behind.

Jim2007

FastFullBack wrote: »

Your very young in pension terms with probably at least 25 years until you drawdown. You should be invested in high risk equities. It will go up, it will go down but over the long term it always goes up.

Most certainly not. You should be investing in equities, just standard stuff, the kind that have a lower risk profile than things like commodities, property etc....

FastFullBack

Jim2007 wrote: »

Most certainly not. You should be investing in equities, just standard stuff, the kind that have a lower risk profile than things like commodities, property etc....

Ya I wasnt clear. I meant a higher risk profile like equities. Something like this is what I meant:
https://www.ilim.com/fund-fact-sheets/retail/+++-Managed_Portfolio_Fund_Aggressive.pdf

It's 6 out of 7 on Irish Life's risk scale and is 100% diversified equities.

Not "high risk equities", like I originally said. Sorry bad language

[EIDT] Changing the link

Jim2007

soap1978 wrote: »

I am paying 8 per cent and the company is paying 11 per cent weekly,I started paying into a pension at 37,am I on the right track or do I need to pay more,I am on medium risk

Well you have seen the various discussions on how much you need, so it's up to you to come up with an estimate that you feel will meet your needs. The other two figures you need is the current value and the projected value, both of which should come from your pension provider. That should give you a feel for where you are.

Contribution 18% in total at this stage, would probably be OK at your age, if you had started at 25. But with a gap of 12 years, I'd guess you are a bit short.

soap1978

AndrewJRenko wrote: »

Will the company pay more if you pay more? If so, it's free money that you'd be crazy to leave behind.

No the company is max out at 11 per cent,I will put a extra 2 per cent into avc in the new year

soap1978

In total it's a 115 euro weekly,,does it sound low?I need to find out more

Static M.e.

Jim2007 wrote: »

You need to work from the other end... how much of an income will you need in retirement?

Generally speaking the consensus is about 60% - 70% of your current income should be able to keep you more or less in the style you are accustomed to. So a quick rule of thumb would be:

((Current Salary * .65) - Your state pension entitlement)) / 0.03

Thank you Jim, this was helpful to me.

Based on the above. I used a pension calculator to work out how much extra a year I will need to fill the gap.

Liam D Ferguson

soap1978 wrote: »

In total it's a 115 euro weekly,,does it sound low?I need to find out more

Just doing the math ... you've said that at present you contribute 8% and your employer contributes 11%, so the total 19% is €115 per week, which suggests that your salary is €605 per week or €31,473 per year.

GreeBo

FastFullBack wrote: »

Your very young in pension terms with probably at least 25 years until you drawdown. You should be invested in high risk equities. It will go up, it will go down but over the long term it always goes up.

37 is not very young in pension terms.
You've missed the 15 most lucrative years from a compound interest point of view.

It's never too late to start, but more importantly, it's never too early.