Should i start Paying into another pension please help.

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SHEEPFARMER

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I need advice please. I closed out my job last year with a voluntary severance package. I had paid into a define contribution pension for 22 years.This pension is now locked in until i reach retirement age. Its a year later i am starting a new job. There is a define contribution pension scheme the employer will match my contribution. i am 45 years old should i pay into this or should i just bank my money. And at least i have access to it to help my kids through college in 5 years time? I need advice..
 
You should still contribute to the new scheme in order to avail of the employer contribution and the tax incentive - it is free money you should take with you.



P.S.: I financed my studies myself. ;)
 
Thanks Merowig.
I was thinking i would pay the smallest amount 3% and employer puts in his 5% so i get their free free money. And bank the rest. My house is paid off and i have 400k savings. I assume the government will allow me to have two pensions when i retire?
 
Hi Sheepfarmer,

If you move your old definded contribution pension to a personal arrangement called a Buy Out Bond, you will be able to access the pension benefits ( tax free lump sum and pension) from age 50. You dont have to access it but at 50 but you have the option. Look at the charges and investment options/performance on both to see if this is worth looking at, taking your personal circumstances into account.
Agree with Merowig re keeping up contributions to the new scheme.

All the best. Vincent
 
Fair play, you're in an enviable position at 45 - house paid and 400K in savings, must be some money in sheep farming :)

You should also be able transfer pension 1 into pension 2, thereby consolidating them into one, if you wanted. You should have been given an exit statement from your previous employer that outlined these options. I did this before with a previous job move.

You don't indicate what your pension pot is from the previous company, if its not that much, perhaps you should contribute more than the minimum.

BTW, 400K in savings is a lot, I would ensure you spread this across a number of final institutions to avail of the 100K bank guarantee scheme.
 
You have a pension scheme; you'll qualify for a state pension. You have kids that are young. You'll need quite a lot of money to put them through secondary school and subsequently through college.

After the next housing crash (almost imminent according to some economists) buy a house and let it out and use the profit for yourself and family.

Sounds simple and it is. Your problem's resolution is a No-Brainer.
 
You've 400k in savings, and worried about being able to put your kids through college? Do all 8 of them want to be doctors?

You should use the full tax advantages available to you through your pension as far as you can afford.

For your previous pension, you should be able to access it from 50 (including tax free lump sum) if you follow the advice above. Timing would work with your kids college age if you do squander all your money before then!

Does your other half work?
 
Folks thanks for all your advice so far i am learning a lot. I worked in the tech industry had a lot of share splits etc and built the house on my days off myself spent all my childhood on building sites.. No sheep were harmed in this speech and really farmers are broke only the EU is funding it. Except for the dairy farmer hes making ok money.
The other half is a national school teacher who wants to take early retirement. Myself to if we can do it. i have 4 kids one does actually want to be a doctor but trying to talk her out of it shes only 10 lol. I will dig out the pension papers i got at the time i don't remember the full details but i don't think we were given a transfer option. The buy out bond was never mention i will start looking at these maybe call them today to see if i can transfer. The previous pension pot has two sides a lump sum paid in by the employer which will be a cash payout at 65. The other got hammered i put in the middle of the road amount the fund Managers estimate i would have a pension of 18000 based on modest growth. I think its currently worth 40000. This is why i was wondering is it worth my while paying into another poor investment/ pension.
 
Hi sheepfarmer. Just one thing from my very limited experience of pensions. Even though your money is locked away until you are a certain age, you can move it around from one pension company to another. But you may lose a little or be penalised in the transaction.
But it helps to remind these companies whose money they are minding.
 
Just called them Richie yes your right got the old bull >>>> o we only have your old work email on file>>>. I gave them my personal email 10 times already. So my pension is guaranteed by the employer so the guy said i should leave it where it is. Got access to my online view and it has grown 10% this year. So i think i will go with leaving it where it is and paying 5% into the new job company plan they will pay in 8% and lets hope its worth something when i get to 65. I think the wifes state pension should be ok to live on. I hope i reach 65 and the rain does not kill me or the government does not put me in an early grave before i get my pension....
 
It sounds like your old pension is a defined benefit one if it's guaranteed?
You should really investigate the terms to understand what you have.
 
How well funded is your defined benefit pension? A lot of them are underwater at the moment. If it's a fairly stable company, no harm in keeping it there. But it is unlikely that they will let you start drawing down the pension before age 65.

It's a no brainer to put money into your work pension. You are in a super place financially. If you would like to retire early, you need to have the money to have a good life beyond work. And that costs money...as does having 4 kids but you have plenty of savings there too. You should get it working for you so you can get capital markets to part pay for the 10 year olds medical training instead of forking out 6 years college fees yourself!



Steven
www.bluewaterfp.ie
 
Working Steven. I have some shares and ETF's the markets are very poor a little compounding . I have some in savings bonds no risk a little interest no dirt.I have a relation who is a broker in London even there the brokers are wondering where to put money.The pension is well funded and has being recently cash injected. The company is a fortune 500 company. They have recently ended the defined benefit for present and future employees and like everyone else they are now doing defined contribution. I was lucky to get out before the chop. But your right in saying i will be 65 before i see it. I have a patch of valuable land which i can sell to give me a little more but land is falling no money in sheep. Where would you place your nest eggs?
 
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I think you are in a pretty good financial position and there is no simple money-saving advice we can give you that you don't do already.
You could hire an independent financial adviser to make some projections for you, its ultimately your decision to speculate where to park your money.
Make sure you are paying the lowest management fees you can on your investments.
 
SHEEPFARMER said:
Where would you place your nest eggs?
Click to expand...

It depends on how much money you need and when you need it by. The longer the investment period, the more you can absorb ups and downs in the market.

With 4 kids, you will have lots of demands on money over the next number of years, so you need to keep it liquid and probably keep a decent amount in cash to pay for college fees for a number of years first.


Steven
www.bluewaterfp.ie
 
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