Go interest only, pay the difference into a pension.
Dismissing pensions as a gimmick is surely a ridiculously sweeping statement?I think it is a bit of a gimmick
Well you will find out when you retire I guess,but do many average earner's get even 4 times their salary in a lump some when they retire I'm thinking,or even 70% of their current wage on a weekly basic, ask the question to people you know,I did and it does not even come close,it was just a thought,Dismissing pensions as a gimmick is surely a ridiculously sweeping statement?
Happy new year clubman,Where are you getting this 4 times salary lump sum figure from? I'm satisfied with how my pension investments are doing to date based on what I've put in and market performance in spite of obvious volatility over the years.
Never heard such rules of thumb myself. Anyway they are probably not much use - what matters is how much you put in and the performance of the assets/funds in which you invest. There is obviously risk and volatility involved but to dismiss pensions as you seem to be doing is ridiculous.Happy new year clubman,
I was always told through different pension schemes in work ,that one should expect 4 times their salary when they retire at the least,or 70% of their current wage,that is something I was told by irish life many years back and it always stuck in my mind
State contributory pensions are subject to PRSI contributions only and are not affected by means. Non-contributory pensions are means tested. On the other hand occupational or private pensions are normally paid net of any state pension which you qualify for.and I think this does effect your state pension not sure though
8% is not an awful lot to be putting away though. And you cannot extrapolate from a single example such as this to the general case as there are so many factors that could have affected the ultimate payout.My Dad paid 4% and his employer the same for just over 30years, and he has always been just above the average wage,his policy was with Irish life for some part then with Canada life,
He got a lump some of 16,000 euro and gets around 800.00 euro a month, does not seem alot to me for someone who has had 8% of his wage going into to a so called good pension
No idea. Haven't assessed this. I just maximise my pension contributions to my age related tax relief limit because I can afford to for the past years and invest in relatively high risk/reward funds because I still have a good while to go. I do put a bit more thought than that into it but I not an awful lot!all I say is be weary and your pension might be doing good now but really that means nothing until your cash in when you retire,Can I ask you what % of your current wage would you expect when you retire on a weekly basic
What countries? And what pension funds? State or occupational/private? Defined benefit (largely a dying breed) or defined contribution?I know In some Countries you automatically get 70% of your wage when you retire after you have paid into your pension during your working life,
What countries? And what pension funds? State or occupational/private? Defined benefit (largely a dying breed) or defined contribution?
Seems to be or is? And what rates of tax and social insurance apply there?Finland is a Country who I am quite familar with , and that seems to be the case there 70% no matter what your job
On what basis do you think this?I also think that 8% into a pension would not be to far of the average in Ireland
Many occupational funds offer a range of funds investing in a range of assets. Many offer bond/cash funds but these are arguably not a good idea other than for those nearing retirement.I think I should have a choice to where I want my employer to put his contribution, ie if I wanted it to go into a high yield savings account along with my contributions which could not be touched until retirement, maybe their is such a thing ?
You have totally ignored inflation. 3% gross or net could well be a zero or negative real return when you take it into account.I calculated 5k at 3% over 30yr using compound interest = 12,136 Euro, taking 5K between combined contributions , so adding a minimum of 5K a year after that for each year and growing with wage increase and inflation, I dont know how to calculate in full but seems a good yield come retirement, I know taxes are an issue but I think the 3% sample is on the low side. Any idea how much this would amount to in 30years,
Since 2000 I've had €88k in contributions (employee + employer) into my DC pension. The value of the fund in September was €110k. I'd have got better performance if it was invested in savings accounts. Pension provider is Canada Life.
Seems like a flawed argument, the argument from the OP seems to be:
State pensions are high in Finland
=> pension schemes in Ireland are a gimmick.
This takes no account of the fact that marginal tax rates may be higher, with a higher level of State Pension Contribution automatically deducted than in Ireland and also no ceiling on the level of salary on which the pension contribution is deducted.
This is no camparison to the State Pension system that applies in Ireland.
The OP seems to be comparing the Finnish State Pension System to Private Pensions in Ireland, a completely meaningless comparison.
Those projections are meaningless in terms of what might actually happen. They are just done so that you can get projections using the same figures from a number of providers and based on those compare the net effect of charges on performance.The original projections on taking out the pension showed projections based on 8% p.a.
Projections in the last few years have now changed to 6% p.a.
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