Start pension at age 43?

Discussion in 'Pensions' started by Foodie1, Dec 20, 2016.

  1. PyritePete

    PyritePete Frequent Poster

    Hi Foodie1,

    as I mentioned earlier good luck with your decision. What I have posted is exactly my own experiences and why I didn't start a pension in my early to mid-forties. When I said i acknowledged it "going against the grain" I mean that I may be one of few that has chosen this path. Another poster (#67) has said that the investments performed poorly and my family & friends told me the same. Maybe they were poorly advised.

    At that time, I was told that by not starting a pension at around 43 (especially with a new job in your circumstances) that it was a gamble. I didn't see it that way at the time and I still dont. I'll be mortgage free sooner and then I can decide what to do.

    Please do research it thoroughly and maybe you can let us know what decision you arrived at.

  2. PGF2016

    PGF2016 Frequent Poster

    Most people aren't preparing for their retirement and there will (soon) come a point when government can't afford to pay a decent pension (when the numbers in employment aren't large enough to support the growing numbers of retirees).
    Gerry Canning likes this.
  3. Gerry Canning

    Gerry Canning Frequent Poster

    Foodie .
    Hes on k80 .
    1. Pension Tax relief = 40% = a huge plus.
    2. Compnay are giving him 3% per annum = a huge plus.
    3. @ 43 with 25 years contributions he protects your futures.
    4. If you can pay mortgage off quicker , that is an ok option , provided you then have the discipline to then really increase pension contributions.
    To me its a no brainer , ie go for it.NOW !
  4. moneybox

    moneybox Frequent Poster

    That argument has been doing the rounds for years, true, elderly population set to double or triple in next twenty years but sure they are thousands of young foreign workers coming to work and pay their taxes here who will no doubt multiply in numbers in years to come.

    Fact of the matter is over half of private sector workers in this country have no pension provision made because their can't afford it due to earning salary of €30,000 or less. It's not because they are badly advised.
  5. trasneoir

    trasneoir Frequent Poster

    From this and a few other comments, I don't think you realise that contributions to PRSAs can be increased, reduced, or suspended indefinitely without penalty.

    And hope the buyer/market hasn't taken the new rules into account when valuing your property?

    I take your point that (taxed) equity in private property easier to cash out than equity in a pension scheme, but I don't think it's follows that it's less vulnerable to political whim. Beating up landlords is one of our oldest national sports - if the state ever gives up on it, I think the GAA will have to start a league.
  6. Merowig

    Merowig Frequent Poster

    If the EU forces that Ireland changes its way how multinationals are taxed I doubt that that many working immigrants will continue to come here...

    My wife earns less than 30k - but has now started after my insistence as well a private pension. She makes only very small contributions - but it is better than nothing. Many people in Ireland have no "financial education". Or prefer to spend now more instead of saving for the future as Pension age lies far into the future and they don't see the importance of saving.
  7. Gervan

    Gervan Frequent Poster

    I started paying into a pension scheme (private, wasn't allowed into the company scheme) in my mid-40s, with an annual income of just over €20,000, not understanding that the money would probably never be mine.
    Having reached the age at which I could have drawn down the pension, I discussed my options with the bank representative, who advised the best thing I could do with this sum of about €25,000, was nothing. Just leave it. If I reach 75 it will be mine. Meanwhile the bank takes annual management fees, the pension levy helped itself to some more...
    I don't think pension contributions on a small income, when there is no income tax advantage, are a good idea. I disagree that "small contributions are better than nothing". If I had put the money into something like a Regular Saver instead, I would now have access to it.
    €12,000 a year seems like a very generous income, from where I am standing.

    moneybox likes this.
  8. LS400

    LS400 Frequent Poster

    Well this has been a bit of a marathon,

    Creamegg, I never said my pension performed poorly, Im quite lucky I started a long time ago, and yes you are correct about the tax incentive and employer contributions as with the amount I have being plowing into for years, has enabled me to now, do a self administered Pension and buy a reasonable sized property from which I will hopefully take advantage of in the near future.

    You and Gordon are also correct that Im not an expert in this field, maybe you feel posters should declare their suitability in certain topics before answering a post. I have contributed to many posts and given my opinion, this is my opinion so have the decency to respect it.

    I have also ran this along side a property I bought 20 years ago, I dont want to sound smug, and dont consider this a boast, but these have performed fantastically, so it suited my needs.

    There was luck involved, had I bought within the last 10 years, I would be singing a different tune. But here and now, at this present moment, it is what I am recommending. I would not and am not afraid to look at options outside a regular pension.

    Dan, What can I say. Your contribution to this tread has been, well, rather lacking, if thats the best you can do. But on that note, and to reply, I firmly believe bad LL will be held accountable in some form their actions in one way or another, I just hope your not too smug to acknowledge it when it does.

    Foodie, thats a great Salary and puts him in a good position to contribute heavily to achieve his goal in 22 years.
    But, and as this is a public forum, its not just about this 43 year olds on a top salary.

    This is also about the average 43 year old here, being in a position to rely on an income aged 65, and, its out of the reach for many.
    PyritePete likes this.
  9. LS400

    LS400 Frequent Poster

    Merowig, I think its great she has looked into doing something for retirement, this resonates with what my wife is doing and has been doing for quite a while, but on looking at maturity, we will be lucky to get two week in the canaries a year out of it.

    So with pensions, you either have to pay handsomely into it, or dont be too disappointed at the end game.
  10. Merowig

    Merowig Frequent Poster

    I see it as a start. No one expects a huge pension when only a small amount is payed in. Though if you have later 100 Euro more per month it already can be a help.

    We also don't plan to retire here in Ireland. So purchasing power will be higher most likely where we will retire.
  11. Foodie1

    Foodie1 Registered User

    We may be able to stretch to 400pm but its a big commitment for sure! Did not forsee such a heated debate on this subject but really appreciate all your comments.
    moneybox likes this.
  12. LS400

    LS400 Frequent Poster

    Appreciate you coming back with above post, that reinforces what I have been saying, at €400/ month, although I don't have the college degrees that other posters have here, I really really implore you go seek alternative investments other-than to rely on a pension based on that premium.

    It's not there, and won't be there in 22 years.
  13. Sarenco

    Sarenco Frequent Poster

    What does that mean? What won't be where in 22 years?

    I really don't want to be rude but, frankly, your posts are becoming increasingly nonsensical.
  14. Merowig

    Merowig Frequent Poster

    Capital Gains tax is extremely high in Ireland in comparison to other countries, Interest rates are low and DIRT eats away on the little interest one receives. Property has the chance to bubble again and it seems Ireland gets rent controls.
    Only a pension wrapper protects one from being taxed to death in Ireland.
    Trying to maximise pension contributions is something everyone should do before investing in other fields.

    The reason pension look unattractive is because the annuity rates are very unattractive. But people forget they cna shop around - and even transfer the pension pot to a pension vehicle outside of Ireland.
    And then you have as well ARFs/AMRFs.
  15. LS400

    LS400 Frequent Poster

    Look at it this way,
    I have been putting away €600/month, for close to the 20 year mark into this pension, granted its probably been a net cost of 400 to me, I am now looking at a pot now of €280k if I should now cash in and purchase a property from the fund.
    This is my intention for the next number of years, as with the tax free rent, I expect it to grow considerably.
    Not bad and I'm not complaining, but it wasn't easy with young kids and the many challenges financially in that time, I'm glad I didn't cash it in.

    This is the other side,
    20 years ago with a small deposit I purchased a house, all went well, and in a short time purchase another and so on.

    The rent paid the mortgage on all properties.
    I'm a blue collar worker, and drive a 13 year old car and I can say I have sacrificed to take this road.

    I ask you now and Gordon, who I said was good with figures. Based on what I have now..
    3 in Ireland and 2 in the Uk,
    Mortgage in total of €230k still to pay.
    Conservative value of properties €1.1m

    What would this have taken in pension funding to achieve, bearing in mind, they are running st approx the same time frame.

    I'm not posting these figures, and never have bragged in anyway shape or form to glote over anyone, and big myself up, but rightly or wrongly, I'm happy with the road I took.

    If I have missed something here, and would have been better off going your route, I will be the first to hold my hands up and eat humble pie.

    Yes it has been a risk, and as i said, had I got cought, I would be singing a different tune. But i didn't, and have know problems in promoting my journey.

    It's not for everyone, but it's me, not some government department controlling my future at the stroke of a pen.
  16. odyssey06

    odyssey06 Frequent Poster

    A small deposit got you property #1? And a little time later you were able to purchase another? Was it on a 100% mortgage or where did your second deposit come from?

    Please give us the name of the bank in 2016 Ireland that will allow anyone to repeat that strategy given deposit rules and stress tests.
    Remember one govt dept put those rules in place and now another has capped rent increases.

    A lot of people tried to execute your strategy but got caught up in the crash... maybe u had a bit more luck or skill or timed things better... but they ended up bust. It may have worked 15 years ago... or maybe not for some. I dont see it working today.

    How many years would it take to save deposit?
    When will the mortgage be paid off and the property start to return a positive yield? Before or after retirement age.?
  17. Sarenco

    Sarenco Frequent Poster

    So, the equivalent of €400 per month after tax over 20 years resulting in a pension pot of ~€280k, after all investment costs. Are they the correct numbers?

    That gives you an annual return just shy of 9.5%.

    Do you really think you achieved that kind of annual return on your high-risk, leveraged property portfolio?

    After all costs and taxes?

    Not a snowball's chance in hell.
    Gordon Gekko likes this.
  18. LS400

    LS400 Frequent Poster

    Apologies, that should have been €180k, (Was a long day) enough for a 2 bed North Dublin. which i expect to let at approx €1000 going straight to the pension fund.
    No, Odyssey, absolutely no to the 100% mortgage, I have worked bloody hard, and not afraid to get up on Saturday and some times Sunday too.

    I did say I sacrificed a lot, and some of that was family life,

    I also said I was lucky in this field, I have heard the horror stories, and have family who got cought. In 2011, i took risks, there were no guarantees, it could all go wrong for me tomorrow, Maybe it wouldn't work to my extent today, but being very aware of the past in this field, I have no fear in purchasing another now.

    I hope I have given people out there another option to consider and to look close at what the realistic gain will be, remember, I was never anti Pension, I just know now that what I thought was a good premium to be paying hasn't quite performed as I was led to believe, and the crux of the thread started by Foodie was the 43 year old, not the taking out of a pension.
    This has been dragged in to a Private / Public sector

    So, I have to put on my blue collar and go fund my wonderful pension, so its over and out on this topic for me,

    I will have to check other threads over the next week or so and contribute my perils of wisdom. Normally the mods would have chastised me by now due to my relentless
    defense. Another thing I proud of, no sin bin :)

    You can breath easier guys.

    Its been nice swimming with the sharks.

    Merry Christmas to all

  19. Gordon Gekko

    Gordon Gekko Frequent Poster

    "perils of wisdom"

    Is that a Freudian slip?
    Sarenco and rob oyle like this.
  20. Gerry Canning

    Gerry Canning Frequent Poster

    Back to the original post.

    I am pleased for those who managed to make gains on property plays , and as they said that ain,t for everyone, and is risky.

    I have no doubt = start that new pension now ..
    Sarenco likes this.