Brendan Burgess
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In line with programme for government
Increase in pension age will not proceed
- Thread starter Brendan Burgess
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Only one fix for this pension issue. Compulsory enrollment from the start. It would in a lot of cases make working to and beyond state pension age less of an issue. Trouble is it will take 25-30 years to see the full benefit and there will still the cohort who retire in the meantime that need to be tackled.
Marco 1972
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Assume anyone championing an increased retirement age has means/plans not to be needing to work till their late 60s, should be pushing for earlier retirement and shorter working weeks.
Though we should have financial education in schools from an early age and even a savings scheme then....
Though we should have financial education in schools from an early age and even a savings scheme then....
Why do you assume that? Many people enjoy working. In the last 10 years where I work everyone who has reached retirement age has chosen to continue to work,either full time or part time. We give all retirees the option or working part time. They can choose whatever hours suit them as long as they are regular hours. Sonme do as little as two mornings a week, some work full time. Nobody just retires fully.
Agree, age should not be a final working limit. Where people choose to continue working, they should be facilitated. My FIL stayed on two days a week on retirement, as he lives alone it was a lifeline for him. He is really missing it now as it ended during COVID.
NoRegretsCoyote
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I agree we need to reduce age-related pension expenditure.
But the pension age is a very blunt instrument.
People in physical professions reach their limits sooner than keyboard warriors like most of us, and indeed your average AAMer can work comfortably past 66.
But the pension age is a very blunt instrument.
People in physical professions reach their limits sooner than keyboard warriors like most of us, and indeed your average AAMer can work comfortably past 66.
Then take that into account when you are planning your future. Why should it be okay to make no provision for your future on the assumption that someone else will provide a pension for you? If you can't that's one thing but if you can and don't that's quite another.
NoRegretsCoyote
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It's called social insurance. Relevant at individual and societal level.
There is very little to be gained from lots of old people below the poverty line.
Insurance required people to pay for it. What happens with pension is that young people pay for those who are retired on the assumption that someone will be able to pay for them when they are old. The amount paid in social insurance comes nowhere close to covering the cost of the State pensions. The people who say "I paid social insurance so I paid for my pension" are ignorant or stupid or both. State employees aren't the only ones getting pensions they didn't pay for.
Sure, but as a cohort they are the richest in the country with the highest disposable income, the highest net wealth, the lowest debt and are the least likely to live in poverty. Children are 4 times more likely to live in poverty. That doesn't seem right to me.
NoRegretsCoyote
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Please support this statement with numbers or withdraw it.
This is just wrong. Median household income for a retired household is €27k, an employed household is €56k. At-work households have a very slightly lower poverty rate (1.6%) than retired households (1.9%).
www.cso.ie for more details.
That is an excellent idea and you are to be congratulated for that. I often thought compulsory retirement was unfair but it was also unfair to expect people in their 60s to continue at a frantic pace as they did in their 40s/50s. It is exactly that type of flexibility that is required.
see here
A single person on €45,000 a year with no kids pays an average of €34.62 a week in PRSI. That pays for illness benefit, widow(er)s pensions and lots of other things. Therefore it's reasonable to say that less than €25 a week goes towards a pension.
If you work for 40 years and retire at 65 the cost of funding a €13,000 a year (€250 a week) pension is €168.80 a week.
From this; "Those under the age of 18 had a consistent poverty rate of 7.7% compared to the rate of 1.7% for people aged 65 or over."
So I was wrong; it's 4.5 times higher for children.
This discusses the concentration of wealth amongst the privileged minority (older people).
You are confusing income and wealth. Gross income is meaningless. If I earn €100k a year but have 4 kids and a large mortgage I'll have a significantly lower net income than a retired couple next door with a combined income of €50k. We tax the hell out of income but hardly tax wealth at all. That's a long way from a meritocratic society.
By the way I'm heading for 50, high paid job, good level of equity etc so the status quo suits me but that doesn't make it right.
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NoRegretsCoyote
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And what does their employer pay? Zero?
I am not. I did not refute your claim that they have the highest net wealth, because of course they do. Note my careful use of ellipses when quoting you.
I refuted your claim that they have the highest incomes, which they do not.
You will have a lower discretionary income because you have more outgoings, but your net income will still be higher.
AAAContributor
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I would say the progressive income tax is very meritocratic. If you are an individual who "merits" a high level of income, you will pay more income tax.
Thereafter, if you are a frugal boy or girl you are free to not consume your after-tax income (or procreate!) and you merit the savings (wealth) you can accumulate free from tax. Actually, that's not really the case, is it?
Stamp duty on Irish shares and property.
The government levy of 1% on investments in products sold by insurance firms.
No indexation factors on investments post-2003 so that the government taxes nominal gains.
Invest in a UCITS fund? Take all the risk? The government will tax that gain that they took no risk on at 41%.
Your portfolio contains UCITS funds A & B. You sell A at a gain and B at a loss? The government will tax the gain but the loss is 100% for your account. You could make an overall portfolio loss and borne all the risk but still have to pay tax.
Want to invest long-term in a UCITS fund? 20yrs, 30yrs? Buy and hold? Nope. Not allowed. After 8 years - a deemed disposal kicks in. Don't have liquid funds to pay the tax due on an asset that only has a paper gain? You are forced to sell to come up with the cash to pay the tax on a paper gain.
Was your "good level of equity" built up through saving and frugality or was it unearned by buying property and assets at the right time and you got lucky?
Would an Irish wealth tax kick in above or below your "good level of equity"?
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The employers contribution covers redundancies as well as the same other things that PRSI covers. If you read the link I posted they say that pensions need to be reduced by one third or PRSI increased. Without those changes there is a major shortfall. Do you seriously think that PSRI receipts cover the cost of the State pension? Do remember that you get it if you have made 10 years contributions.
Okay, so you accept that pensioners have the most cash, the lowest expenses and the most wealth and are at a much lower risk of living in poverty than young people. Great stuff. We are in agreement.
NoRegretsCoyote
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It covers redundancies dozens of times over.
I'm just interested in your claim that:
Can you back it up?
For me the question is something like: "Assuming there was an investment strategy, do total PRSI contributions (employer and employee) cover, in actuarial terms, social benefits paid out over the long term?"
PRSI was a tiny bit under €10bn in 2019, which is not a well publicised figure.
Really? So if I inherit a big house (that's where most wealth is in this country) from my parents I'll pay inheritance tax on some of it, unless I lived there for a few years before they popped their clogs in which case I'll pay nothing. Thereafter I'll pay nothing on that wealth but will pay some tax on the income I get from it if I invest it but less than I'd pay if it was earned income.
A paper gain is a real gain that you choose not to cash in.
85% of all wealth in this country is in the main residential property and pensions. Neither are subject to any form of tax and even the populists, sorry socialist child killers aren't planning on taxing those.
As a newly qualified tradesman at 22 I read about EMU and the fact that interest rates would drop significantly I figured that there's be a property boom so I sold my car and bought an apartment. That got me on the property ladder. By 1998 I had an investment property and in 2008, after reading about the subprime market in the USA I thought there would be a property crash so I sold up. So it was a combination of luck and a little bit of foresight but it was almost completely unearned. The €100k a year I pay in income taxes sort of balanced things out.
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