Is 53 too late to start a pension

Halladubha72

My husband is 53 and has no pension. Is it too late to start a pension or should he start buying shares himself but knowing what shares to buy is the question? There is a pension scheme in his work place but at this late would it cost him a fortune.

Mitzy

I don't think that it is too late although the pension pot will be very small with only 12 years contributions.

I would suggest speaking to an independent broker. Will his employer contribute to a pension also? If so they could contribute an additional 5% of his salary to the pension fund.

Bear in mind that you get 40% tax relief on all contributions made (assuming you are on the higher tax bracket). Buying shares is risky if you don't know what you are doing and you will be subject to capital gains tax on any gains made.

denismc

It's never too late, if there is a scheme at work I would look into this first as there is often an option to do annual voluntary contributions (AVCs) which you get tax relief on as the other poster mentioned.

The amount you can contribute and get tax relief on depends on your age.

A lot of companies will contribute to that pension pot, the money is invested in a combination of shares,bonds,cash depending on your age risk profile.

Alternatively you can contact an independent broker, they will have a range of funds that you can invest in.

Sometimes your bank will offer various pension fund options via a 3rd party broker.

P.s As your husband is 53 he can contribute upto 30% of his wage to a pension and claim tax relief, the amount he can contribute goes up as he gets older.

RoboRat

The best time to plant an oak tree is 20 years ago, the next best time is now.

No, it's not too late to start, but he should talk to a financial advisor as to what will give him the best returns. If he has any extra money (inheritance etc) then he can put that in too.

AndrewJRenko

https://www.boards.ie/discussion/2058307970/is-53-too-late-to-start-a-pension

What do you mean when you say it will cost him a fortune? In most workplace, pension schemes, the employee is in control of how much they want to contribute.

If the employer provides any kind of pension contribution matching, this is giving you an immediate 100% return on investment which is pretty much unbelievable. And there’s these significant pension relief involved with pension investments. You won’t get either of these benefits if he were to invest in shares directly.

Better late than never.

niallers1

Not too late to start a pension. It's the best show in town. Tax relief on the way in, In his case probably zero tax on the way out and all growth is tax free.

If he goes messing with buying individual shares he will probably lose money and if he makes a profit will be taxed to debt. ( Pun intended)

Pension is the only show in town really. It's a no brainer.

Most people probably regret not paying into a pension but I've never heard anybody say they regretted having a few extra bob in their pocket at retirement age.

ThreeGreens

It's not too late. But either his is going to have to commit significant sums into it, or understand that it's not going to be worth much when he retires.

Best part would be for him to discuss it with whoever looks after the scheme and talk about the amount he's considering putting it, the tax implications and get a realistic estimate of what he's going to get out. When he know what he's likely to get out and what it will cost him (net of the tax relief) then he can make a better decision about if it's worth it to him or not.

Jim2007

https://www.boards.ie/discussion/2058307970/is-53-too-late-to-start-a-pension

It's not too late to start planning for retirement, but you must be realistic about the outcome, it most likely won't be great, but still better than not making any effort.

The worst possible option would be for him to start buying shares himself, in fact there are very few people who should do this. The changes are extremely high that he will not even end up with the money he started out with.

Based on your comment, I suspect you don't fully understand all the options available in your husband's work pension. Yes it would be very expensive if he was to joint a pension fund at this stage and try to buy back all the missing years in it. But there are normally some options available to late joiners that don't require this, although of course the benefits would not be nearly as good. So I'd say ye should start and full investigate what is on offer there before making any decision at this point.

And above all don't act on the basis of what Joe or Mary said down the pub, because very often it is bad advice, although given with the best of attentions.

Halladubha72

Thank you all very very much for your helpful information. we will definitely speak to someone in his company regarding pensions and what's available to him.👍👌👌

CuriousCucumber

I started putting money into my pension about 8years ago, and it's worth €140k now.

My company probably put in 60% and me 40%, so based on your husband's company contributing nothing, a pension of €84k is achievable over 12 years.

But that all depends on his salary. Over the 8years I've had a pension my average salary would have been approx €58k.

I realistically would have contributed about €45k myself, so around 13k is returns

pat_sconce

Possibly your mortgage is paid off or close to being paid off and that leaves a little spare cash.

I would look at putting as much income as possible that attracts 40% tax into a pension.

And an error most people make is thinking the pension is for when you are 66. This is only the starting point. Assuming good health you will live to 85+, hence the time period to look at for you and your husband is about 30 years.