Need to start a pension

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MandaC

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I need to start a pension(probably should have done this 10 years ago). Went onto the pensions boards website, they estimate I need to pay in €900 (before tax) net approx. €530 per month to get a pension worth €19,000 p.a. This, topped up with the contributory old age pension would give me a salary of €29K approx. per year.

The bottom line is that I just cant afford to pay this type of money now, or ever into a pension. The max I can afford to pay is approx €250 Net per month. Is it worth me taking it out with this amount, or should I invest my €250 into something else. I am on a reasonable salary now, but it is not going to substantially increase over the coming years, if anything, it will decrease slightly.

I am panicing now because I see both my mum and dad with nothing only non contributory pension facing into their retirement!

Thanks

Manda C
 
After putting a roof over your head a pension is the next most important investment you make. 250 pm net is worth just under 500 pm going into a pension after tax relief at the top rate of tax or approx 350 pm at the lower rate of tax.

You can start a pension now and offset against last years income and claim tax relief before 31/10/2006.

Most life assurance companies do PRSA AVC and AVCs. Quinn are probably one of the best for charges approx 1% management fee, with no other fees payable AFAIA

You need to look out for

Brokers or salespersons commissions
• Entry charges
• Transaction charges
• Exit charges
• Encashment penalties
• Fund manager fees for actively managed funds
• Bid / Offer spread​
 
My overall financial position is not too bad now. Age 36, Salary approx. €50K, mortgage €550 per month,though I am thinking of moving and will almost certainly have to significantly increase my mortgage if I do so, car loan €240 per month(3 years left to run), SSIA €254 till next april, (will be worth approx. €16k). I dont want to put the full amount of this into a pension, (I am going to buy myself something nice out of it!!)

I am definitely going to look into the Quinn Life pensions as the charges seem quite low. My family never believed in this sort of stuff(pensions), well to be honest couldnt really afford it.

Whilst I am quite good with figures, all the stuff with bid, offer spread, etc just loses me and when you are told to pay €500 per month (net) to get a pension of €16K in 30 years time, it just does not seem worth it, and I always just keep putting it on the long finger.

Thanks for all the advice.
 
my advice, since you've already looked into it at this stage, is dont go putting it off any longer just because what you've been told you need will not give you enough. Start one this week and as a starting point put into it what you can afford.

The figures won't look any better next year, you not going to get younger
 
I wouldn't commit anything to a pension contract if there is a risk that you'll have to reprioritise next year to increase your mortgage. While the pension tax breaks are great, so is the tax free growth in your home. You might also want to think about getting your car loan cleared early by additional repayments (assuming it is a variable rate loan), as the interest rate you are paying is likely to be harsh.
 
Thanks for the replies. I am definitely still going to look into it and perhaps get started Even if I increase my mortgage, I reckon I could still afford to pay €254(my SSIA amount) into a pension, or some kind of long term investment.

I may think about paying off the car loan early and save some interest as I am already paying extra into my mortgage and have reduced the term from 30 years initially to 18 years. I might enquire if I start paying €500 per month now, could I decrease that to €250 per month, if I do take out a new mortgage.
 
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