Pensions Where to Start

Scrooge

New Member
Messages
7
Hi Folks,

I need to get started on a Pension here in Ireland I know dropped the ball here a bit; but looking for advice on companies options etc. I spent a large number of years in Australia and only returned 3 years ago and the whole pension scheme here seems a bit confusing or else I just have not given time to get my head around it.


Background on my situation.

33 Years Old
1 x Mrs working full time
2 kids less than 4 years old
No mortage
1 x Personal Loan 8k (should be paid off by May)
$70k AUD in Pension Fund (If I ever see it)
Wage €80k (Self employed Contractor)
2 x cars < €16,000 combined
No other assets of mention
Necessary Outgoings per month €1200 (All Bills; Diesel, Internet, Shooping, Electricity, Insurance etc)

If I pay into a Pension for 10 -15 years and die whats happens to those payments do they go to my Mrs and Kids? Or are they lost?

What % of my wage should I be putting aside for a pension given the fact I am a late starter as such with pension funds

Any ideas or reccomendations on companies that setup and manageme funds here


Alos open to suggestions on investments if there are more efficient ways to invest money.
 

Protocol

Frequent Poster
Messages
3,266
If you die before retirement, the accumulated pension fund is not lost.

I haven't time to go into the details now, but a typical PRSA would become part of your estate.
 

NotMyRealName

Registered User
Messages
24
Hi Folks,

I need to get started on a Pension here in Ireland I know dropped the ball here a bit; but looking for advice on companies options etc. I spent a large number of years in Australia and only returned 3 years ago and the whole pension scheme here seems a bit confusing or else I just have not given time to get my head around it.


Background on my situation.

33 Years Old
1 x Mrs working full time
2 kids less than 4 years old
No mortage
1 x Personal Loan 8k (should be paid off by May)
$70k AUD in Pension Fund (If I ever see it)
Wage €80k (Self employed Contractor)
2 x cars < €16,000 combined
No other assets of mention
Necessary Outgoings per month €1200 (All Bills; Diesel, Internet, Shooping, Electricity, Insurance etc)

If I pay into a Pension for 10 -15 years and die whats happens to those payments do they go to my Mrs and Kids? Or are they lost?

What % of my wage should I be putting aside for a pension given the fact I am a late starter as such with pension funds

Any ideas or reccomendations on companies that setup and manageme funds here


Alos open to suggestions on investments if there are more efficient ways to invest money.
Well, if you're self employed then an executive Pension is the way to go. Get the lowest cost and fees provider ( learned my lesson ......late) . No mortgage? Rent? Childcare? Anyway , pay off the loan first. Keep a good cash reserve to make sure of no credit card interest or car payments. Then pension what you can afford. An exec pension can also be accessed from age 50 but terms and conditions apply. Many people on here more expert than me who can help steer you. Keep the fees LOW. Small % eat into fund over time. That's my advice...
 

Scrooge

New Member
Messages
7
Thanks for the replies guys;

The executive pension sounds interesting to be honest I only expect to be self Employed for another 5 years max

So would this be transferrable to another fund if I went PAYE after 5 years ?
 

NotMyRealName

Registered User
Messages
24
Thanks for the replies guys;

The executive pension sounds interesting to be honest I only expect to be self Employed for another 5 years max

So would this be transferrable to another fund if I went PAYE after 5 years ?
I don't know, I did it the other way around..An exec is way more tax efficient
 

Gordon Gekko

Frequent Poster
Messages
4,852
Well, if you're self employed then an executive Pension is the way to go. Get the lowest cost and fees provider ( learned my lesson ......late) . No mortgage? Rent? Childcare? Anyway , pay off the loan first. Keep a good cash reserve to make sure of no credit card interest or car payments. Then pension what you can afford. An exec pension can also be accessed from age 50 but terms and conditions apply. Many people on here more expert than me who can help steer you. Keep the fees LOW. Small % eat into fund over time. That's my advice...
Self-employed people can’t set-up an Executive Pension.

Nor can they access their pension at age 50.
 

amadan1000

Registered User
Messages
4
Well, if you're self employed then an executive Pension is the way to go. Get the lowest cost and fees provider ( learned my lesson ......late) . No mortgage? Rent? Childcare? Anyway , pay off the loan first. Keep a good cash reserve to make sure of no credit card interest or car payments. Then pension what you can afford. An exec pension can also be accessed from age 50 but terms and conditions apply. Many people on here more expert than me who can help steer you. Keep the fees LOW. Small % eat into fund over time. That's my advice...
Please elaborate on your journey and experience the finding the lowest cost fees .I have a directors pension and am only now unravelling the hidden costs and looking for alternatives. Not meaning to hijack the thread as this information should be pertinent to op.
 

NotMyRealName

Registered User
Messages
24
Please elaborate on your journey and experience the finding the lowest cost fees .I have a directors pension and am only now unravelling the hidden costs and looking for alternatives. Not meaning to hijack the thread as this information should be pertinent to op.
Well my most recent experience is on another thread " pension pot transfer"
I started an exec pension by moving my small PRSA into it 14 years ago. I used a main pension provider, through my bank.
I've been in a position, even through the recession, to add to it in lump sums every year. Initially, small lumps then, as company cashflow improved, larger lumps in the last 5 or 6 years.
Provider charged 5% on contributions, 3% if over 12k and 1% Annual Management Charge.
Download a compound interest calculator and see what that can do over time.....
I'm currently renegotiating the terms for going forward.
My contract allows for 100% transfer value....other contracts may not. Ask your provider for details and shop around with providers. I wish I'd clued into this earlier. However, running a business is hard enough and at least I started a pension .....
Let's say you start with 50k in your pot today and you contribute 12k per annum @ 1% AMC and 3% contribution charge. We can only presume ( hope for) growth and the magic number is 5% per annum. In 15 years that's total €257,856
Now assume .75% AMC and 0% contribution charge ( this is gettable in the market).
In 15 years that's total €362,889
So € 105,000 in creeping fees
My cornflakes are boiling in my stomach...... thinking about it
 

NotMyRealName

Registered User
Messages
24
Well my most recent experience is on another thread " pension pot transfer"
I started an exec pension by moving my small PRSA into it 14 years ago. I used a main pension provider, through my bank.
I've been in a position, even through the recession, to add to it in lump sums every year. Initially, small lumps then, as company cashflow improved, larger lumps in the last 5 or 6 years.
Provider charged 5% on contributions, 3% if over 12k and 1% Annual Management Charge.
Download a compound interest calculator and see what that can do over time.....
I'm currently renegotiating the terms for going forward.
My contract allows for 100% transfer value....other contracts may not. Ask your provider for details and shop around with providers. I wish I'd clued into this earlier. However, running a business is hard enough and at least I started a pension .....
Let's say you start with 50k in your pot today and you contribute 12k per annum @ 1% AMC and 3% contribution charge. We can only presume ( hope for) growth and the magic number is 5% per annum. In 15 years that's total €257,856
Now assume .75% AMC and 0% contribution charge ( this is gettable in the market).
In 15 years that's total €362,889
So € 105,000 in creeping fees
My cornflakes are boiling in my stomach...... thinking about it
Apologies.....this calculation is completely flawed......update in a few mins
 

NotMyRealName

Registered User
Messages
24
50k with 12k added per annum @ 3% allocation charge and 1% AMC for 15years @ 5% growth p.a. is total €321,680
50k with 12k added per annum @ 0% allocation charge and .75% AMC for 15 years @ 5% growth p.a. is total €338,145
So €17k difference over 15years.
Obviously if the sums are larger the charges damage is greater over time.
Apologies to all for the previously posted misleading calcs. I'm not a pro ( obviously) so consult one if you need to. It'll be money well spent.
 

NotMyRealName

Registered User
Messages
24
My posts may have flaws. I'm learning the hard way. The key takeaway here is...Look into your individual circumstances and do SOMETHING.... professionals can help but you'll need to ask the right questions.
 

Scrooge

New Member
Messages
7
Thanks for the above I am 100% going to go to a professional at some stage stuff is way above my head just trying get my head around it all first
 

Sheepshooter

New Member
Messages
8
Self-employed people can’t set-up an Executive Pension.

Nor can they access their pension at age 50.
I'm a contractor - I'm self employed (via limited company).

I have setup an executive pension and I can access it at 50.

So you can figure by now I think you are very wrong here.
 

Gordon Gekko

Frequent Poster
Messages
4,852
I'm a contractor - I'm self employed (via limited company).

I have setup an executive pension and I can access it at 50.

So you can figure by now I think you are very wrong here.
There are two possibilities:

1) I am “very wrong here” and you are right

2) You don’t know what “self-employed” means and you actually work for a limited company
 

SBarrett

Frequent Poster
Messages
3,600
I'm a contractor - I'm self employed (via limited company).

I have setup an executive pension and I can access it at 50.

So you can figure by now I think you are very wrong here.
You are a company director as opposed to self employed which is being a sole trader. That is why you can set up an executive pension plan. You can also only access your pension from age 50 if you leave your company and sell/ liquidate your shares in the company.


Steven
www.bluewaterfp.ie
 

Sheepshooter

New Member
Messages
8
There are two possibilities:

1) I am “very wrong here” and you are right

2) You don’t know what “self-employed” means and you actually work for a limited company
Or 3. You don't know what 'self-employed' means and I actually own that limited company so am self-employed.

See

revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-on-employment-status.pdf

Anyway - it is a bit grey & doesn't really matter. I agree you can only access your pension by leaving/closing down that Ltd. company.
 

Gordon Gekko

Frequent Poster
Messages
4,852
Or 3. You don't know what 'self-employed' means and I actually own that limited company so am self-employed.

See

revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-on-employment-status.pdf

Anyway - it is a bit grey & doesn't really matter. I agree you can only access your pension by leaving/closing down that Ltd. company.
My word...

A company has a separate legal personality to its owner.

It’s why, when a company owner says “but that’s my money there in the company”, his or her advisor has to point out that it’s actually the company’s.

You are not “self-employed”. You are employed by a third party, a company, that you happen to own.

A self-employed person is a sole trader who pays their taxes and submits their accounts through their Form 11 tax return.

Choose your battles...
 

RedOnion

Frequent Poster
Messages
4,997
@Scrooge
As you can see above, your exact employment status has a massive bearing on your pension options.

To get back on topic, and allow people point you in the right direction, you might clarify if you are:
  1. A self-employed sole trader
  2. A contractor, via an umbrella company
  3. An owner / director of a limited company
  4. Something else.
 
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