Congratulations MrEBear - not too many youngsters are thinking about their pensions at your age. Tell your friends to do the same.
Don't put it off too long - it can be very easy to wait until the next budget, then wait for another event (Christmas, Birthday, Holiday, etc). Procrastination is your enemy.
I found a great tool in the app store (the Money wizard) which I use all the time for these types of calculations. Using their Retirement tool, you can work out how much pension fund you need to build up. form there, it can help you work out how much you need to invest.
Whilst waiting for the budget may seem like a good idea, it may not be! Your pension requirement will not change (budget or not), so starting now - even with a smaller amount - is a good idea. You can always adjust your contributions up or down depending on your circumstances at any time.
why o why would anyone even consider a pension. they are worthless! they are not guaranteed unless you work as a civil servant etc and private pensions are a gamble as we all know. i know people may say that in 35 years it will all be different.....really! i know people who have put massive amounts on pensions to be told that they are worthless.
take my advise and enjoy your money because if you start a pension someone else will enjoy it for you!
Whilst waiting for the budget may seem like a good idea, it may not be! Your pension requirement will not change (budget or not), so starting now - even with a smaller amount - is a good idea. You can always adjust your contributions up or down depending on your circumstances at any time.
I found a great tool in the app store (the Money wizard) which I use all the time for these types of calculations. Using their Retirement tool, you can work out how much pension fund you need to build up.
2 posts in and both of them plugging your iPhone App
I've contacted the broker that deals with my life assurance (my mam insisted I have this) to see what he can do for me.
Hi Kramer, thanks for the reply, I appreciate the advice. I've contacted the broker that deals with my life assurance (my mam insisted I have this) to see what he can do for me.
Thanks to those who offered creative advice and to those who only belittled the question I asked please remember, if you don't have anything nice to say don't say anything at all. Bear
Bear you must face the facts.. a broker will sit with you and smile like a cat knowing that he will get a percentage for the first year while you on the other hand may not see the full value of your pension EVER! trust me i know people who lost years of paying into a pension with nothing to show for it.
you may think my advice is unconstructive but sadly its the truth. if i were to put away X amount a week at the minute i would buy a house as you can get excellent value in houses ATM at least after x amount of years its worth something which cannot be said for a pension.........
You sound like someone who had a bad experience with a pension policy and are now throwing the baby out with the bathwater. If you had a bad experience with buying and selling shares, due to bad advice, excessive stockbroker fees or simply bad luck on your investments, would you therefore conclude that buying in shares was a bad idea?
I've been working in financial services for twenty one years (latterly as a broker) and have never come across a single person who has lost all their money in a pension policy. I have come across those who got out less than what they put in. This is usually down to one or several factors: -
(1) Excessive charges. You should always check with the broker or salesperson as to what exactly the charges are before you sign up. If you're not happy to pay these charges, don't sign up.
(2) Investments that go down in value. There are many many pension funds to choose from. Some are guaranteed never to fall in value. Some will fall as well as rise from time to time. If you don't understand or accept why funds fall from time to time, you should opt for ones that don't.
My own pension fund is currently worth about 90% of what I've put in. I'm perfectly happy with that performance as it includes a significant drop during 2008 and I'm looking forward to the recovery. When you take into account the tax relief at 41% I'm well ahead, even if I get taxed at a lower rate when I retire.
I'm interested to hear that you'd invest in Irish residential property at the moment, with no tax relief, the NPPR, a looming property tax, tax on rental income etc. If you did that and it transpired that Irish house prices fell further from when you bought, would you conclude that buying a house is a bad idea too?
1- how can a company like irish life canada life etc predict what your pension maybe in say 2045 when you retire? have they a crystal ball?
2- tax relief is great but also the cut for the broker is also great as the first year goes to the broker! corect or not?
3- when you do achieve the magical day and your pension is ready to collect and is not sufficent enough for your needs you will be accessed if applying for additional help from welfare....so in other words you will miss out on medical card etc etc
4- as i explained previously in my posts' - yes buying property is far far more superior than buying a pension. at the end of the day the property is worth something to you or your partner dead or alive a pension on the other hand.......hmmmm what % does your partner get when you die.......after busting your backside for years to pay into an unknown investment!!!?
5- with the state of the country ATM whats to say that tax relief on pensions where to be abolished......would pensions be such a great idea in your opinion then?
6- you may well say that ATM property is a bad investment.....youd be totally wrong. for a young chap at 25 id rather see him buy a house than waste thousands on a pension
7- the only pension worth buying into would bea state pension through a civil service career
i can go on and on but bottom line is that whatever advice this young man gets is to stay well clear of a pension. at least with a property he can rent it out but with a pension what can he do...PAY INTO IT PERIOD!!!
Not as far as I know. In fact you should never buy any form of investment from a person or company who claims they can predict the future.
Totally incorrect. No pension product pays the first year's contributions to the broker. If someone tried to sell you a product like that, why on earth would you sign up to it? Commissions must be disclosed at point of sale.
It's specified by law that the charges on any Standard PRSA from ANY company can be no more than 5% of each contribution and 1% of the fund per year. That must include ALL charges - commissions to brokers or salespeople, fund manager charges, pension company administration and documentation fees - the lot.
So are you suggesting that it's a better long-term plan for a 25 year old to have so few assets accumulated at retirement that he can qualify for a medical card and other means-tested State benefits?
If you die before retirement, your estate inherits 100% of your pension fund. If you die after retirement, depending on what sort of pension vehicle you choose, your estate can also inherit 100% of an Approved Retirement Fund.
I've already explained in my previous post why buying a house is a very poor investment from a tax efficiency perspective compared with a pension.
The four year plan published yesterday did include measures to reduce (not abolish) tax relief over a gradual period on certain types of pension contribution, though not all. However, it's by no means certain that these recommendations will be implemented. The plan itself encourages people with alternative ideas to put them forward for discussion.
But even if some future Government did decide to abolish tax relief on pension contributions in the future, I would certainly recommend then that clients stop making pension contributions and seek some other form of saving for the future.
On the house side, if you've bought a house and some future Government decides to introduce some form of penal property taxes, you can't simply stop contributions. You're lumbered with it and will incur substantial legal and estate agency fees if you decide to sell...if you're not in negative equity and can actually sell the thing.
This is your opinion. Can you back this up with any facts? Figures?
Another big sweeping statement. Can you back this one up with any facts? Figures?
I too could go on and on about how wrong that advice would be. Here's just a few random phrases to do with property investment that spring to mind...negative equity, rising interest rates, falling rents, rent not covering mortgage, getting calls at all hours of day and night from tenants, costs of repairs to the property, periods of no rent, keeping records for the taxman, etc. etc.
Despite all the above, I still believe that buying a property as an investment can be a good idea for certain people, if the particulars of the purchase make sense for their situation. Equally, I believe that contributing to a pension is not suitable for everyone.
But to suggest that contributing to any form of private pension is a bad idea for anyone and that buying a house is automatically better for someone whose circumstances you know nothing about is simply wrong.
I am aware of numerous people who are very unhappy with their pensions, some have been wiped out completely then again they invested in bank shares...
5-yes i would state that investing in property at this young mans age seriously outweights a performance of a pension
7- if this chap does buy a house we can all clearly see that ireland is nearly rock bottom
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