Lump sum pay into mortgage or start pension?

Fella

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By the middle of this century the old age dependency ratio is projected to double from the current level to around 46%.

Is it remotely plausible that the State would be in a position to means-test such a high proportion of the population? It would be a logistical and political nightmare.

Failing to save for retirement out of a fear that you could lose a State benefit would be extremely foolish.
I respect your opinion Sarenco but the reality it the government took over 2 Billion from private pension funds ,i don’t remember people on the streets rioting like what would happen in other european countries .

I personally know many intelligent people that won’t fund a pension for fear of it been raided or means tested in future , everyone knows we are heading for a pension crisis there is no chance I am putting money away as i strongly believe that the government will interfere with it . It can be argued that it is foolish to save for a pension in Ireland when the government have shown disregard for people’s private pensions.

You just have to look at housing , if your prudent in this country you end up paying for those that are not , a pension crisis is looming the ones that have saved will fund the ones that haven’t one way or another .
 

Cervelo

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Many years ago I got a great bit of advise from my IBEC rep while on a coffee break in the WRC
We started to talk about personal pensions and I was arguing all the usual negative arguments against starting a pension and then she said something that struck a chord with me
"Its better to be looking at it then looking for it, It doesn't mater how big or small, how well its preformed or not, what the government do or don't, when the time comes you'll be glad you did"
 
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SBarrett

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I respect your opinion Sarenco but the reality it the government took over 2 Billion from private pension funds ,i don’t remember people on the streets rioting like what would happen in other european countries .

I personally know many intelligent people that won’t fund a pension for fear of it been raided or means tested in future , everyone knows we are heading for a pension crisis there is no chance I am putting money away as i strongly believe that the government will interfere with it . It can be argued that it is foolish to save for a pension in Ireland when the government have shown disregard for people’s private pensions.

You just have to look at housing , if your prudent in this country you end up paying for those that are not , a pension crisis is looming the ones that have saved will fund the ones that haven’t one way or another .
So out of fear of having a fraction taken out of their pension fund*, they are doing nothing instead? And being wholly reliant on the same government to tell them when they can stop working and how much they can live off in retirement? :confused:


Steven
www.bluewaterfp.ie


* I don't for one second agree with what the government did on this and yes, they can do it again. But this not a case of cutting off your nose to spite your face?
 

David1234

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I personally know many intelligent people that won’t fund a pension for fear of it been raided or means tested in future , everyone knows we are heading for a pension crisis there is no chance I am putting money away as i strongly believe that the government will interfere with it . It can be argued that it is foolish to save for a pension in Ireland when the government have shown disregard for people’s private pensions.
If they are indeed means tested surely all assets are going to be taken into consideration and not just private pension funds. If they are not paying into a pension what are they doing with their money?

Contributing to a pension is far more tax efficient than any other asset accumulation at the moment.
 

Fella

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So out of fear of having a fraction taken out of their pension fund*, they are doing nothing instead? And being wholly reliant on the same government to tell them when they can stop working and how much they can live off in retirement? :confused:


Steven
www.bluewaterfp.ie


* I don't for one second agree with what the government did on this and yes, they can do it again. But this not a case of cutting off your nose to spite your face?
I never suggested doing nothing but i’d have my money in assets i can liquidate when I require the money . The fraction they took ends up adding up to quite a lot off a fund when you consider the compounding effect it had.

just look at how the country is run open your eyes , people that spend like idiots can live in houses that are impossible to repossess , you’ve middle class hard workers with less disposable income than others that have never worked a day in their life . I see it everyday i don’t trust this country or government i see the looming pension crisis , do you honestly think the guy next door who never worked a day in his life is going to lose his state pension or have it cut ? no chance we can’t even evict people from a house in this country .
 

David1234

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I never suggested doing nothing but i’d have my money in assets i can liquidate when I require the money . The fraction they took ends up adding up to quite a lot off a fund when you consider the compounding effect it had.

just look at how the country is run open your eyes , people that spend like idiots can live in houses that are impossible to repossess , you’ve middle class hard workers with less disposable income than others that have never worked a day in their life . I see it everyday i don’t trust this country or government i see the looming pension crisis , do you honestly think the guy next door who never worked a day in his life is going to lose his state pension or have it cut ? no chance we can’t even evict people from a house in this country .
What assets would you recommend? If you contribute €100 into a pension fund and are taxed at the higher rate you will only have the purchasing power of roughly €50 for this other asset when you are hit with your income tax.

If you distrust the country and government I would suggest you look at potentially moving countries.
 

Gordon Gekko

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Neglecting to fund a private pension because of some fear around a future raid by the State is crazy.

All because less than 0.75% was raided for a few years during the worst financial crisis in the history of the State.
 

Sarenco

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The fraction they took ends up adding up to quite a lot off a fund when you consider the compounding effect it had.
True but it pales into insignificance when compared to the taxes applied to investment income (up to 55%) and gains (33%) on assets held outside a pension fund.

It is bonkers for a higher rate taxpayer in their mid-40's with no pension fund to prioritise paying down a tracker mortgage ahead of contributing to a pension.

It would also be bonkers (IMO) for such a person to prioritise making after-tax investments ahead of maximising their pension contributions.

Speculating about future taxes or levies is futile - we can only make reasonable decisions based on we know today.
 

Fella

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Speculating about future taxes or levies is futile - we can only make reasonable decisions based on we know today.
That’s what i’m doing though we can see the pension crisis looming but these lunatics decide to give 5€ extra to everyone on the social welfare when there are jobs out there not been filled , you couldn’t make the stuff up.

Any money I have left won’t be on show for these guys to dip there hand into , there are plenty of ways to store your money and buy assets that will increase in value over time .
 

Codogly

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Great point ; where can you store money outside the reach of Government ...middle income Ireland need to start protecting there savings
 

SBarrett

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Great point ; where can you store money outside the reach of Government ...middle income Ireland need to start protecting there savings
With the current level of reporting, holding it on your person is one of the only ways. But then you could be robbed and lose 100% of your assets instead of a % of your gains.

PPS number is required to open an account almost anywhere and the transaction is then reported back to the Revenue.


Steven
www.bluewaterfp.ie
 
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