Should I setup a Pension or no?

Hey everyone, first time poster. I'm hoping to get some insight/advice on my current situation.

I am 23 years old and just started my first full time job. It is in the tech industry and reasonably well paid, for a recent graduate. My employer offers a pension scheme and contributes a percentage and there are a number of investment portfolios to choose from. I don't have all the details yet.

I am wondering is it wise to start investing in a pension at this stage in my life? I can afford it. I really don't like committing to having my money locked up until I am 65 though. I'd love to consider other investment options, if I knew what they were!

I guess what I'm saying is, I have an opportunity to start saving for retirement now, early, and to do it 'right'. Any info to help me do that is greatly appreciated.

Short answer yes, absolutely contribute. The earlier you start, longer the money will be working for you.

Money being locked up is a down side but if employer is contributing it's basically free money so IMO you'd fee mad not to sign up.

As you're very young, highest allocation on stocks would be the portfolio I'd be picking

I know it's 40 years down the line, but there will be a stage when you don't want to work. You are going to have to live on something. And if you are in a well paid job, you will have a decent lifestyle that you won't want to give up when you retire. Investing in pension now gives that money 40 years to grow.

Yes, there are other investment options available and no one is saying you can't do them too. However, a pension not only gives you take breaks on your own contributions but you r employer can also add money into your pension pot without any cost to you.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

No brainer.... yes! Spread your investment choices... but lean mainly towards higher risk equities.
You have no idea the power of compounding. Notch up your salary contribution % every year (on top-off any any salary increases)... you need to ratchet up to somewhere around ~20% pa (inclusive of whatever your employer is kicking in). Then you can kick back and even in ~20 years time you have no idea the pleasure you will get when looking at the value of your funds.

Most of your friends will not contribute much to their pensions - ignore them.

Thanks for the responses, I might post up here again when I get more info about the pension scheme itself and the options available to me. Obviously this is very new to me and I'm still a bit green!

I'm contributing 20% to mine, with employer dumping in an extra 6% on top. 20% is the max you I can contribute for my age. Will review this again once I hit next threshold of 40

+1 all above............ Maybe consider getting PHI as part of the pension policy this is also tax deductible

oh and get everything in writing and keep the originals of all your docs from Pension company and get full info on all the fees and commissions they take.

Bluesniper.

Do it.
........
Many people say pensions are a waste of money.Wrong.

1.You get tax relief. (where else do you get a 20% + tax back)
2. Your company puts in another %.
3. The fund grows tax free.
4. Since its a company pension I expect the fees to be on the lower scale.
Sector 001 is so -so correct, and Stevens is plain sense.

SBarrett said:

your employer can also add money into your pension pot without any cost to you.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Click to expand...

Unless it's a PRSA - in which case the employee pays USC BIK on the employer's contributions.

In this case, because the employer is making contributions, I agree that pension investment is a good idea.

Pensions are fantastic. Yes you pay tax on the way out, but at a much lower rate because you get your lump sum at a mix of 0% and 20% tax and then don't pay PRSI once you're 66. The power of compounding over a long period of time is incredible. Especially in a wrapped environment where there is no tax under the bonnet. I like to think of it as an interest free loan of €40 from the State for a very long time. All I have to do to get it is pony up €60.