Level of Savings

Antares35

McGaggs wrote: »

We, on the other hand, need or 2 cars, semi annual new phones, 2 foreign holidays a year, minibreaks, fast fashion, etc. We'll all need more than €12k a year to keep all our crap going on.

Define "we".

The J Stands for Jay

Antares35 wrote: »

Define "we".

A stereotype based on stereotyped expenditure of 20-45 year olds. I don't know anyone who does all of this, but there's some people doing some of it some of the time.

OEP

screamer wrote: »

Yes, but not to the point that they will be in future, that’s what I mean by fully taxable. Pension funds are not taxed at the same rate as income for under 66s. Be prepared to hand over a whole lot more of the pension fund to the taxman as the squeeze tightens.

Possibly but it will be political suicide for any party that decides to do that, and politicians are always looking out for themselves!

screamer

OEP wrote: »

Possibly but it will be political suicide for any party that decides to do that, and politicians are always looking out for themselves!

I agree, but if the money’s not there, it’s not there, future pension funding is already being raided to keep up with current payments. With dwindling employees it won’t be, and taxing wealth will be necessary. Pensions will be an easy target similarly to payroll taxes, taken at source.

The J Stands for Jay

OEP wrote: »

Possibly but it will be political suicide for any party that decides to do that, and politicians are always looking out for themselves!

Tax rates on general will be raised, rather than angering the grey vote. Increases on state pensions will be smaller than otherwise (govt will hope no one will notice), and they've already reduced the civil service pensions for new entrants.

On the other side, immigration can take up the demographic slack.

The J Stands for Jay

screamer wrote: »

I agree, but if the money’s not there, it’s not there, future pension funding is already being raided to keep up with current payments. With dwindling employees it won’t be, and taxing wealth will be necessary. Pensions will be an easy target similarly to payroll taxes, taken at source.

Government pension spending is paid from current taxation. The national pension reserve fund is long gone and was short lived.

butrasgali

I'm 50,I have Currently got a pension pot of 150k ,and 398k if I keep the same payments to 65..plus 7k a year from the old pension before 2013.
Roughly I'm putting 10k in total a year(5k and 5k from the company)
Would you call this an ok pension or better than ok..it seems alot of money .thanks

The J Stands for Jay

butrasgali wrote: »

I'm 50,I have Currently got a pension pot of 150k ,and 398k if I keep the same payments to 65..plus 7k a year from the old pension before 2013.
Roughly I'm putting 10k in total a year(5k and 5k from the company)
Would you call this an ok pension or better than ok..it seems alot of money .thanks

It'd give you about €100k tax free, plus about €19k a year.

Pussyhands

McGaggs wrote: »

Yeah, once I hit 68 (or whatever age the government tell me), I'll only be interested in bingo and trips to the bank and post office.

You'll own your home when pension age. You'll likely have raised a family and could downsize, pocketing 200k by doing that.

The J Stands for Jay

Pussyhands wrote: »

You'll own your home when pension age. You'll likely have raised a family and could downsize, pocketing 200k by doing that.

If I'm relying on 200k plus state pension to live on, I'll only be able to afford bingo and chatting to the staff in the bank and post office.

Jim2007

screamer wrote: »

I agree, but if the money’s not there, it’s not there, future pension funding is already being raided to keep up with current payments. With dwindling employees it won’t be, and taxing wealth will be necessary. Pensions will be an easy target similarly to payroll taxes, taken at source.

Not going to happen. It will in fact be the one thing that will be hard to touch. Politicians do what get them elected and when the majority of voters are older, the last think you do is start taking away their income. Talk to young residents of Florida or Zurich about education and childcare and you'll see how it is to live in a place where the old voters dominate.


And as for pension funds being raided, I'm still waiting to see evidence of that. Oh the various levies make nice click bate for the media, but the reality is that it does not amount to a hill of beans in the lifetime of a pension fund.

Jim2007

Buddy Bubs wrote: »

Gotta love the Swiss. Why didn't they just say 15 times salary. Or 25 times expenditure

There is a very simple reason, by law pension funds are required to generate an annual return after expenses of about 2% - 4%. The required return is set each year by the government based on the economic outlook. A failure to deliver means the fund manager must pay into the fund.

Jim2007

Louis Friend wrote: »

It also makes no sense.

My income requirement in retirement will be far lower than it is now, even lower that 0.6.

When you strip out mortgage costs, kids, working costs, pension provision itself, and savings, there not much left.

It’s 0.33 as it happens.

And what are you going to do? Sit in the garden and watch the grass grow....


Expenses usually go up in early retirement not down because most people are still very active and suddenly have plenty of time to do whatever you want to do.


Even later there can be further outlays in things like home modifications for easier living etc....

The J Stands for Jay

Jim2007 wrote: »

There is a very simple reason, by law pension funds are required to generate an annual return after expenses of about 2% - 4%. The required return is set each year by the government based on the economic outlook. A failure to deliver means the fund manager must pay into the fund.

Does the same apply to post retirement funds?

Jim2007

OEP wrote: »

Does that depend on the canton? I'm guessing you're probably Zurich if you work in the finance/investment/banking industry. I work in pharma for a Swiss company, so Basel, and they seem pretty keen on getting onto the property ladder

No I live out in the sticks down in Kt. Bern. I fact I can go for days or even weeks without in countering an English speaker!


If you are an expat, living in Basel and hanging about with the usual mix of expats and professional Swiss, then ya, I can understand where you are coming from.



But that is not the typical Swiss situation. If you get to know the typical family in 'die Innerschweizer', you'll find a very different perspective on life.

OEP

Jim2007 wrote: »

No I live out in the sticks down in Kt. Bern. I fact I can go for days or even weeks without in countering an English speaker!


If you are an expat, living in Basel and hanging about with the usual mix of expats and professional Swiss, then ya, I can understand where you are coming from.



But that is not the typical Swiss situation. If you get to know the typical family in 'die Innerschweizer', you'll find a very different perspective on life.

Fair enough, interesting to know! I don't actually live in Switzerland but travel there a lot and everyone I work with is there. I find the Swiss both fascinating and odd!

Jim2007

Pussyhands wrote: »

The whole pension thing seems like a marketing thing to me.

All the pensioners around today and around for the last 10-20 years, vast majority of these didn't have any pension outside the state pension and they're doing fine.

I saw some site on about pensions and calculations and they were saying the state pension might not even exist when you retire! Eh, there's no way someone will be left with 0 income.

The only reason I'm contributing to a pension is because it's matched by my employer.

It's not marketing, just look at the demographics, all across the western world the work force is in decline and no matter how you play it, the work force that was there in the past to pay people's pension will not be there when it is your turn.


What people did in the past or even now, is totally irrelevant because that set of circumstance will not exist when it is your turn.

tscul32

McGaggs wrote: »

A stereotype based on stereotyped expenditure of 20-45 year olds. I don't know anyone who does all of this, but there's some people doing some of it some of the time.

I'm at the upper end of that age group, as are most of my friends and most of us have no interest in any of that stuff.

Jim2007

butrasgali wrote: »

I'm 50,I have Currently got a pension pot of 150k ,and 398k if I keep the same payments to 65..plus 7k a year from the old pension before 2013.
Roughly I'm putting 10k in total a year(5k and 5k from the company)
Would you call this an ok pension or better than ok..it seems alot of money .thanks

It depends on your lifestyle, what you want to do in retirement and of course if you even want to work or are able to do so until you are 65.

Buddy Bubs

My parents are both 67. They both have state pension but my father had private pensions plus he got this ridiculously good deal where he retired from Eircom aged 39 and has had a pension ever since.

Their combined weekly income guaranteed is

State pension x 2 - 400 euro
Eircom pension - 400 euro
Private pension- 200 euro

1000 a week between them and they use quite a bit of it, far better than 400 a week if my father only had state pension like the mother

They have 2 cars and he bought a brand new van and converted it to a campervan, not running all that plus household bills, food, clothing on 400 a week.

They're not prepared to sit around and do nothing with no money, my father planned for it and they are reaping the rewards.

Yyhhuuu

Buddy Bubs wrote: »

My parents are both 67. They both have state pension but my father had private pensions plus he got this ridiculously good deal where he retired from Eircom aged 39 and has had a pension ever since.

Their combined weekly income guaranteed is

State pension x 2 - 400 euro
Eircom pension - 400 euro
Private pension- 200 euro

1000 a week between them and they use quite a bit of it, far better than 400 a week if my father only had state pension like the mother

They have 2 cars and he bought a brand new van and converted it to a campervan, not running all that plus household bills, food, clothing on 400 a week.

They're not prepared to sit around and do nothing with no money, my father planned for it and they are reaping the rewards.

Is that their after tax income?

Geuze

screamer wrote: »

I’ve a decent level of savings after saving hard for the past 3 years. As for pensions I just don’t trust the government. Pensions are all oh tax relief at 40% yada yada. Yes, now maybe. There are 4 workers for every pensioner. When I get to retirement age, there’ll be even fewer workers per pensioner. Public sector pensions are far too much as in overpaid compared to contribution, so that’ll continue to eat the national pension funds. By retirement, which I fully expect to be around 70 by the time I get there, I also expect there to be state pensions of less than 100 per week and that private pensions will be fully taxable. Pensions for me, are a gamble, and I’d rather have something more tangible than that to rely on.

The tax relief is a big incentive, and very attractive.

Yes, you are correct, the old-age dependency rate is increasing.

The Single PS pension scheme since 2013 is less generous, and all PS now pay more contributions.

All pension income is already taxable.

Buddy Bubs

Yyhhuuu wrote: »

Is that their after tax income?

Before tax but they're jointly assessed and won't have any tax on first 36,000 of that...they'd pay quite little tax

Point is, they have a lifestyle to do as much as they want really for rest of their lives. They have too much really, they don't need it all but I couldn't see them doing it on 400 a week.
They'd survive on 400 but there'd be no campervan and not much discretionary spending

Jim2007

Jim2007 wrote: »

In Ireland, getting on the property ladder is considered a wise move. But here in Switzerland, it's considered to one of the dumbest things you can do! They consider spending money on a 3/4 bedroom house for most of your life when you only need it for a short period while the kids are at home, to be a waste of money and a very high risk approach from a financial point of view.

In Ireland rent can easily cost twice what a mortgage payment would be. That's not about perception, that's the fact that you have to live somewhere, it costs less to buy and you have an asset at the end.

Antares35

Buddy Bubs wrote: »

Before tax but they're jointly assessed and won't have any tax on first 36,000 of that...they'd pay quite little tax

Point is, they have a lifestyle to do as much as they want really for rest of their lives. They have too much really, they don't need it all but I couldn't see them doing it on 400 a week.
They'd survive on 400 but there'd be no campervan and not much discretionary spending

Depends where they'd put their money too. Mine put it into a second property abroad (Spain), so their holidays are there. Much much lower cost of living too so pension stretches a lot! They usually go for a couple of months at a time. Also means they can sell up and release the equity if they want/ get too old to travel there. But, if like your parents they would prefer travelling different places then obviously that wouldn't be ideal so different strokes I suppose. I'd love a campervan to travel around tbh!

Padre_Pio

Pussyhands wrote: »

The whole pension thing seems like a marketing thing to me.

All the pensioners around today and around for the last 10-20 years, vast majority of these didn't have any pension outside the state pension and they're doing fine.

As the saying goes "Past performance is not indicative of future results"

Jim2007

Deleted User wrote: »

In Ireland rent can easily cost twice what a mortgage payment would be. That's not about perception, that's the fact that you have to live somewhere, it costs less to buy and you have an asset at the end.

Of course it's perception. If most people believe that home ownership is the way to go, there will not be much of a rental market and vice versa.

Louis Friend

There’s not much craic on the cards if you’re living on €13,000 a year.

Jim2007

Jim2007 wrote: »

Of course it's perception. If most people believe that home ownership is the way to go, there will not be much of a rental market and vice versa.

Except there is a rental market. If there was no demand for rentals then prices would fall.
It's not "perception" that it is cheaper to buy than rent in Ireland. It's fact.

dublin49

surely the tax relief aspect of pensions is overstated ,its just Tax deferred until you get it in old age. no?