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Paying a pension is like donating your money to a stranger

Markus Antonius

With a new "opt-out" corporate pension system being introduced to replace the current "opt-in" system, it raises a question I've always had especially for the 20-35 year old age group - Why on earth are you obsessed with paying so much into a pension?

-You are young

-You are broke

-You need a place to live

-Holidays to go on

And you are making aditional contributions out of your pay because why? You get a tax break and a contribution from your company? Is this really worth it?

You need this money now, stop donating to to a future version of yourself who you probably don't even like all for the benefit of blood thirsty pension companies

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Kevhog1988

https://www.boards.ie/discussion/2058267019/paying-a-pension-is-like-donating-your-money-to-a-stranger

Mine is paid by the company without a contribution by myself

Brussels Sprout

who you probably don't even like

wtf

gameoverdude

https://www.boards.ie/discussion/2058267019/paying-a-pension-is-like-donating-your-money-to-a-stranger

Eh...I'm not too sure how to respond to this.

If you're on a higher tax rate, you're getting around 50% extra plus company contributions for your future self.

Enjoy your holidays and cheap beer. I'll enjoy my retirement.

Once you get use to it, you budget accordingly. Won't miss it.

HeidiHeidi

Because what do you plan to live on when you stop working?

Leg End Reject

I pay because I don't want to be hungry in a cold house when I retire.

joseywhales

Maybe I don't want to work forever?

Cluedo Monopoly

I feel people should manage their pension breakdown/split more. Everyone seems to put their faith in the pension providers. For example I change my pension a few months ago to have less equity/shares and it has already saved me a few bob. Not many shares have risen in last few months. I will increase equity when I feel market has neared the bottom.

elperello

https://www.boards.ie/discussion/2058267019/paying-a-pension-is-like-donating-your-money-to-a-stranger

Sit down and talk to a retired person who put some money in their pension and have a chat with them about how they got on.

I know a few who are very glad they provided for their old age.

Pissy Missy

If you've ever been unfortunate enough to be on social welfare, you'll see how limiting, stressful and soul destroying it is. Absolutely no way I want to live like that for my retirement. A pension/future investments are the way forward.

gameoverdude

https://www.boards.ie/discussion/comment/119731386#Comment_119731386

Euro millions for the win! Just believe.

Pissy Missy

https://www.boards.ie/discussion/comment/119731399#Comment_119731399

Yes please 🙏

Markus Antonius

https://www.boards.ie/discussion/comment/119731028#Comment_119731028

That's betting on you being alive at retirement (touch wood), a retirement that will in all likelihood extend into the 70s at some point.

How many times have you heard an OAP say "My one regret in life was that I didn't pay more into my pension when I was in my 20s"

https://www.boards.ie/discussion/comment/119731041#Comment_119731041

The public pension and the wealth accumulated throughout my life that would have been translated into forms that won't be ravaged by inflation or gambled on the stock market

gameoverdude

https://www.boards.ie/discussion/comment/119731424#Comment_119731424

None, but I've heard quite a few saying they wished they started a pension earlier, if not for themselves but for next of kin.

I started one at 22. Don't miss the outlay as I'm used to it.

Markus Antonius

https://www.boards.ie/discussion/comment/119731440#Comment_119731440

A few weeks ago I was chatting to a colleague of mine and she was moaning about how she was living from paycheck to paycheck and how everything is so expensive etc. I asked her if she was paying AVCs and she was maxed out!

Ridiculous! And such a widespread problem because the pension companies send their scheming salesmen out to give these corporate talks where they spread the filthy rumour that it's a bad idea to not start as young as possible - then everyone gets fearmongered and starts spreading it to everyone else.

gameoverdude

https://www.boards.ie/discussion/comment/119731463#Comment_119731463

Don't be asking me for fiver in a few years.

greyday

So my employer pays 5% and I pay 10% of which the state pays approximately 4%, to be very basic, I put 100 per week in and and between my employer and the state they pay another 150 in and you think this is stupid, figures are not exact but close enough to show you this thread is an absolute joke, Equities have also been proven over time to be one of the best types of investments, You should already be rich if you can beat this type of investment.

Markus Antonius

https://www.boards.ie/discussion/comment/119731468#Comment_119731468

I pay enough PRSI. I get nice juicy paychecks every month because the pension funds can't dig their long nails into my money!

Just because I'm getting the money now, doesn't mean i'm being irresponsible with it.

L1011

https://www.boards.ie/discussion/comment/119731479#Comment_119731479

So you're paying tax to invest for the future when you could be doing it tax free?

Akrasia

You have 5 decades before you retire. In the past 3 decades we have had the Tech bubble market crash, the 2008 financial crash, the housing crash, the 2023 crash.... All of these wiped out pensions (which were in turn bailed out by tax payers)

You not only need to invest for your pension, you need to be lucky in those investments or else you could see your savings wiped out or inflated away several times between now and your retirement.

A lot of the people who are living it up now with good pensions had defined benefit pensions from the golden age before the ladder was hoisted up behind them and we're all left with defined contribution pensions that could be worth nothing if another crash happens just before your retirement

You could try to hedge your pension by buying land or gold or gambling on bitcoin or tulips or NFTs, but it's all just the luck of the draw for the middle classes.

gameoverdude

https://www.boards.ie/discussion/comment/119731479#Comment_119731479

I'm lost.

So pension funds need nail clippers?

On the pigs back with that business plan.

As flippant as my statement above, I do believe financial planning is prudent.

I'll freely admit I'm crap with money. Take it off me!

MakersMark

https://www.boards.ie/discussion/comment/119731041#Comment_119731041

Why the good old taxpayer of course!

Markus Antonius

https://www.boards.ie/discussion/comment/119731478#Comment_119731478

You talk as though this is a bullet proof plan! Think of all the poor souls who worked themselves to death (so to speak) only to find them selves prematurely dying in their 40s, 50s, 60s. Depressing to think of all the extra things they might have experienced if they kept that money for themselves.

Not to mention the fact that a giant recession could hit the year you retire which would annihilate your return

greyday

https://www.boards.ie/discussion/comment/119731463#Comment_119731463

If she is living from pay check to pay check now, how do you think she will get on living of the state pension if she doesn't top it up with her own contributions?

Akrasia

https://www.boards.ie/discussion/comment/119731505#Comment_119731505

The good old tax payer who have spent countless billions bailing out banks and pension funds in recent years...

The national pension reserve fund was cleaned out in 2008 to protect private savings and pension funds (mostly for the super rich)

If that money was invested in the state we might be able to afford a decent state contributary pension

greyday

https://www.boards.ie/discussion/comment/119731496#Comment_119731496

There is a period about 8 years before you retire where the pension company winds down your exposure to equities, after each of the crashes you mentioned, the S&P still reached record highs afterwards.

MakersMark

https://www.boards.ie/discussion/comment/119731496#Comment_119731496

You dont appear to understand the markets.a pension plan that mirrors the S&P 500 will do exceptionally well over 50 years.

Mine, started in 1994 with a salary percentage of 3%, matched by employer ran for 12 years. No more contributions since 2006.

Hit a high of nearly 900k, down to 650k now. Been thru all the recessions.

I expect it to double in the next 8 years, even taking into account t the projects 20% market slump this year.

The only pension plans that failed were those investing in a singular stock. Diversified investments have flourished.

Markus Antonius

https://www.boards.ie/discussion/comment/119731512#Comment_119731512

What good is having all that money when you are ravaged with arthritis or have some other debilitating illness which makes going on a holiday sound like hell? The amount of elderly who have no idea what to do with thier money is astonishing! They end up using it to fatten their grand children or donating it to the local priest in their will if they have no children for themselves

Akrasia

https://www.boards.ie/discussion/comment/119731509#Comment_119731509

And if you have a modest pension, the state will take most of it to pay for your nursing care if you're unlucky enough to live long enough to waste away in a nursing home

greyday

https://www.boards.ie/discussion/comment/119731509#Comment_119731509

Think of all the poor souls who lived beyond retirement age but didn't have a pension, I would suggest they lived a far worse life than their neighbour who was prudent and did have a pension, even if I die before retirement age, its a nice nestgg for my family to do as they please with.

Akrasia

https://www.boards.ie/discussion/comment/119731532#Comment_119731532

How low did it go after the last big crash in 2008?