Hi,
Some would say this is a great time to start a pension as the unit values have come back so much. You are buying units that were as this value a few years ago or more! You have to think long term, 10 years from now this will be a blimp on a stock market history chart. I hope
Personally, I have increased my pension contributions.
Regards
Colm
Agreed 100%
Think of your question another way. When is the right time to start a pension?
The astute and usually more successful investors buy when the stock price is going down and sell when the price is going up.
Right now you are buying units of stock at a very cheap price. Chances are they could fall more in the coming months, but you are already getting them at a knock down price.
Historically anybody who gets in just before the upturn in markets, makes a fair old profit in the long term.
That aside you should start contributing to your pension as early as possible. If nothing else for the government tax relief on offer.
If you look at it this way, even if you are on the lower taxband and lose 20% on your pension value in year one, you still havent lost any money other then the tax relief your benefited from (thats just looking at it from a pessimistic perspective) that would of gone into government coffers anyway.
Cheap units is a load of codology. What's happened in the past is nothing to do with what will happen in the future.
Also the performance of your pension is more a function of what happens to the markets in 20 years time than anything to do with the current environment.
Say you have 25 years to go. The return in each of those 25 years (2009 to 2033) is equally important to the return from your first year's premium. The second years premium will be dependant on the returns from 2010 to 2033 and so on. By 2033 you'll have paid 25 premiums and a 1% return that year will have a similar financial impact on your retirement proceeds as a 25% return on your first year's premium next year!
Bottom line is that a pension is a very important long term decision and trying to time when to start or stop paying premiums is very secondary decision
I assume you mean buying property or shares yourself.First time poster and also wondering about a pension.
Surely property and shares are the way to go long term rather than a pension where you pay administration fees for the first few months anyway!
Cheap units is a load of codology. What's happened in the past is nothing to do with what will happen in the future.
Also the performance of your pension is more a function of what happens to the markets in 20 years time than anything to do with the current environment.
Say you have 25 years to go. The return in each of those 25 years (2009 to 2033) is equally important to the return from your first year's premium. The second years premium will be dependant on the returns from 2010 to 2033 and so on. By 2033 you'll have paid 25 premiums and a 1% return that year will have a similar financial impact on your retirement proceeds as a 25% return on your first year's premium next year!
Bottom line is that a pension is a very important long term decision and trying to time when to start or stop paying premiums is very secondary decision
Hi, My point was that one should not be afraid to invest in a falling market like this one for the long term, and do not try and pedict the bottom. And also, I would be happier to start my pension this year than last year as i can avail of last years tax benefits and this years, in this year ( i think you can still do that).
Agreed that its more of what happens later, but since we don't know what is going to happen, I would prefer to buy more units cheaper now before the market grows again (assuming it does of course), taking advanatage of the great tax deal outlined by others
Regards
Colm..
Hi,
I've decided at long last to start a pension (I'm 38). I was considering starting a consensus fund with Irish life - medium risk which was suggested by my broker. But with all the talk of stock markets etc collapsing I'm wondering is this a wise idea. I am completely illiterate when it comes to pensions and I'm only starting one because everyone says you should have one. Can anyone please advise me what I should do?
Hi,
I've decided at long last to start a pension (I'm 38). I was considering starting a consensus fund with Irish life - medium risk which was suggested by my broker. But with all the talk of stock markets etc collapsing I'm wondering is this a wise idea. I am completely illiterate when it comes to pensions and I'm only starting one because everyone says you should have one. Can anyone please advise me what I should do?
hi kittyjo,
stay away from high risk and medium to high risk...
medium risk sounds ok, but talk to your broker and find out more information...medium risk can cover a number or areas...
for example up to this year, bank shares were considered safe as houses and therefore low to medium risk...now they would be considered high risk...
definately start your pension, but make sure you are not exposed to the stock market in the current climate...get into a medium or low risk fund for the time being and then longer term when the stock market settles down, move it to a higher risk, and then out again if it goes down again...
What has been the performance of the Irish Life consensus fund in the last few years?
A 1% management charge, 0% contribution charge would be better for any regular premium pension with a term of less than 35 yearsThanks for all your advice folks. I'm making the leap. Of course now, having read a few other related posts, I'm wondering is 4% on each contribution and 0.75% annual fund management a reasonable enough charge or should I look elsewhere?
A 1% management charge, 0% contribution charge would be better for any regular premium pension with a term of less than 35 years
Thanks for all your advice folks. I'm making the leap. Of course now, having read a few other related posts, I'm wondering is 4% on each contribution and 0.75% annual fund management a reasonable enough charge or should I look elsewhere?
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