1- how can a company like irish life canada life etc predict what your pension maybe in say 2045 when you retire? have they a crystal ball?
Not as far as I know. In fact you should never buy any form of investment from a person or company who claims they can predict the future.
2- tax relief is great but also the cut for the broker is also great as the first year goes to the broker! corect or not?
Totally incorrect. No pension product pays the first year's contributions to the broker. If someone tried to sell you a product like that, why on earth would you sign up to it? Commissions must be disclosed at point of sale.
It's specified by law that the charges on any Standard PRSA from ANY company can be no more than 5% of each contribution and 1% of the fund per year. That must include ALL charges - commissions to brokers or salespeople, fund manager charges, pension company administration and documentation fees - the lot.
3- when you do achieve the magical day and your pension is ready to collect and is not sufficent enough for your needs you will be accessed if applying for additional help from welfare....so in other words you will miss out on medical card etc etc
So are you suggesting that it's a better long-term plan for a 25 year old to have so few assets accumulated at retirement that he can qualify for a medical card and other means-tested State benefits?
4- as i explained previously in my posts' - yes buying property is far far more superior than buying a pension. at the end of the day the property is worth something to you or your partner dead or alive a pension on the other hand.......hmmmm what % does your partner get when you die.......after busting your backside for years to pay into an unknown investment!!!?
If you die before retirement, your estate inherits 100% of your pension fund. If you die after retirement, depending on what sort of pension vehicle you choose, your estate can also inherit 100% of an Approved Retirement Fund.
I've already explained in my previous post why buying a house is a very poor investment from a tax efficiency perspective compared with a pension.
5- with the state of the country ATM whats to say that tax relief on pensions where to be abolished......would pensions be such a great idea in your opinion then?
The four year plan published yesterday did include measures to reduce (not abolish) tax relief over a gradual period on certain types of pension contribution, though not all. However, it's by no means certain that these recommendations will be implemented. The plan itself encourages people with alternative ideas to put them forward for discussion.
But even if some future Government did decide to abolish tax relief on pension contributions in the future, I would certainly recommend then that clients stop making pension contributions and seek some other form of saving for the future.
On the house side, if you've bought a house and some future Government decides to introduce some form of penal property taxes, you can't simply stop contributions. You're lumbered with it and will incur substantial legal and estate agency fees if you decide to sell...if you're not in negative equity and can actually sell the thing.
6- you may well say that ATM property is a bad investment.....youd be totally wrong. for a young chap at 25 id rather see him buy a house than waste thousands on a pension
This is your opinion. Can you back this up with any facts? Figures?
7- the only pension worth buying into would bea state pension through a civil service career
Another big sweeping statement. Can you back this one up with any facts? Figures?
i can go on and on but bottom line is that whatever advice this young man gets is to stay well clear of a pension. at least with a property he can rent it out but with a pension what can he do...PAY INTO IT PERIOD!!!
I too could go on and on about how wrong that advice would be. Here's just a few random phrases to do with property investment that spring to mind...negative equity, rising interest rates, falling rents, rent not covering mortgage, getting calls at all hours of day and night from tenants, costs of repairs to the property, periods of no rent, keeping records for the taxman, etc. etc.
Despite all the above, I still believe that buying a property as an investment can be a good idea for certain people, if the particulars of the purchase make sense for their situation. Equally, I believe that contributing to a pension is not suitable for everyone.
But to suggest that contributing to any form of private pension is a bad idea for anyone and that buying a house is automatically better for someone whose circumstances you know nothing about is simply wrong.
