Why do I need a pension?

K

Klesser

Registered User
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Ok this most likely sounds like a really stupid Question but why exactly do I need a private pension?
I mean the government pension seems like enough and by the time im 65 I most likely will have to mortgage or other debts and being 65 wont exactly want to go on nights out and wear designer clothes.
Also I dont like the thought that if I die before I retire all the money I put in will be wasted. I have a life assurance policy to take care of my child if the worst should happen to me.
Am I missing something big here or being a niave 23yr old?
 
Klesser said:
I mean the government pension seems like enough and by the time im 65 I most likely will have to mortgage or other debts and being 65 wont exactly want to go on nights out and wear designer clothes.
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Bear in mind that there are qualifying conditions for both contributory (PRSI contribution history) and non-contributory (means tested) state pensions. Not everybody necessarily qualifies for one or the other.

You may want to retire early rather than waiting until 65 (66?) for the state pension.

Are you sure that the state pension will be enough? While you may not have a mortgage and other expenses you will still have outgoings on normal domestic bills etc. and you could at some point need to move to a care home.
Also I dont like the thought that if I die before I retire all the money I put in will be wasted.
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It won't be wasted - it will be paid out to your estate.
 
210 pw isn't a lot.

A tank of petrol is 60 euro, house insurance 300 pa, plus many many other bills, costs, etc.

You'd need much more than 210 pw to live a good life.
 
I agree with above posters. I don't understand this "when I'm 65 I won't need money" argument and I've heard it quite a bit.

You will probably need a decent car as you don't won't to be out fixing it with your tool box and roaming scrap yards for spare parts. You will have more time to travel and more time for leisure pursuits. You may want to pursue your hobbies to fill your days or do some courses. You may also have grand-children and want to put a smile on their face by treating them. Your child would be glad of some help to buy a house. The list just goes on

The tax incentives are excellent and 23 is a good age to make a start. If you wait till you are 40 you then must put in much bigger amounts to make it count.

I never thought about pensions until a few weeks ago and I am nearly 40 (from 23 to 38 went quicker than a Cork Keeper deserted his net)!. And from some obscure concept -an unwelcome deduction in my pay packet the scales have fallen from my eyes and it now makes so much sense.

I am lucky that I will have a state pension but I am currently looking into topping it up through AVCs.

Go for it - do your research and get some independent advice....

S
 
Klesser:
Here is a snap shot. Granny Crazywater buys a new car every two years (she feels more at ease about it not breaking down). Is out on the town on average 5 nights a week, playing cards, active retirement etc, and meets her buddies for lunch outings on a regular basis. She loves football and golf so has her big TV and shy sports subscription. She maintains her own house and by her own desire is totally independent. She pays all her own bills and pays for the top level of health insurance. During 2007 she travelled to England, China, South Africa and Florida as well as a holiday in Ireland and several weekend trips with the AR. Try doing all that on a state pension!
 
My retired widowed mother's situation would be similar. To add to that she recently had to spend c. €20K on a combination of routine maintenance and emergency home improvements. If she was depending on the state pension alone I doubt that she would have been able to do this and all the other things that she does as a matter of course.
 
Remember also that the State Pension may or may not continue to be €210 per week or it's equivalent when you retire.
 
I agree with others about living expenses while retired.
My parents live somewhere where they need a car, the house needs regular maintenance, and they are very fond of their broadband and Sky connection.

Even with no mortgage, no expensive holidays and a cheap social life , they
would not get by on 210 a week, or anywhere close.
 
Well guys I took in all your points and I started one. The grand total fo a fiver a week but its a start anyway! I feel so responsible and grown up now! Still praying that there will be a cure for old age soon enough though
 
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