Start pension at age 43?

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

  1. Sarenco

    Sarenco Frequent Poster

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    I've got that but since you won't tell us about this "alternative route" this is starting to get very repetitive.

    Again, what's your alternative approach for supplementing your retirement income?
     
  2. LS400

    LS400 Frequent Poster

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    Blimey, do you want me to name the property and location,, I've been banging on about that route all evening. :)
     
  3. LS400

    LS400 Frequent Poster

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    Yes, property eventually went south, but if we were to adopt that attitude with the pension crisis of late, you would run a mile from any pension guru who came within touching distance of you.

    On the balance of probabilities, I have full confidence, my route would see a better return.
     
  4. Sarenco

    Sarenco Frequent Poster

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    So your "alternative route" is to simply to invest in property? You can invest in property through a pension vehicle and Gordon has already shown you in some detail why that works out to be a better approach.

    I strongly suspected that you didn't really understand how pensions worked. Now I know you don't.
     
    trasneoir and Gordon Gekko like this.
  5. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Sorry, I don't understand your post.
     
  6. Gordon Gekko

    Gordon Gekko Frequent Poster

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    I have shown you why your "route" is demonstrably inferior. For a 43 year old, the same property investment with the same performance does 53% better in a pension vehicle. And that ignores the bonus of employer pension contributions.

    I agree with Sarenco, you just don't understand pensions, which is a shame because your own wealth will suffer as a result. However, what we're trying to avoid is other poor souls (such as the OP) listening to your wild advice.
     
    PGF2016 likes this.
  7. cremeegg

    cremeegg Frequent Poster

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    You might get a higher return on a property investment, than you would get on the typical equity/bond mix that pensions are generally invested in, or you might not. From 1996 property did well, from 2006 property did badly.

    Whichever asset you choose to invest in, you will get tax advantages if you make the investment through a pension.

    To reflect on your own experience, the reason you got a poor return was because your investments did badly. You would have gotten a better return if your investments did better. Either way you paid less tax because it was within a pension.
     
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  8. LS400

    LS400 Frequent Poster

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    Gordon,
    Did you actually look at what you wrote,
    Your talking about a chap who is 43 and starting to take out a pension, how in the name of god, can he build up enough in his pension to fund a property vehicle on which to satisfy an income within 22 years, bearing in mind, the last few years of his investment will go into a very low risk fund, which probably realistically gives the investment growth 15 years.
    Your talking about a self administered pension, you need to have built up a sizable pot to do this.

    Your figures have been massaged completely, and totally biased with tunnell vision, towards taking out this pension,

    I dont profess to be an expert in this field, I pay someone for advice, this same pension, agent, also has diverted into property as he admits a lot of people will be sorely disappointed on the maturity of their pension, unless they have the ability to pay substantial funds into it.

    So, I understand enough, to advise a 43 year old to give it a wide berth.
     
    PyritePete likes this.
  9. cremeegg

    cremeegg Frequent Poster

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    Hi LS400,

    Having read through this thread, I took what I thought was the strongest post against the OP taking out a pension. That is your post 45. I responded to it in detail. I thought that was a respectful way to address a poster with whom I disagreed.

    Let me now try a different and perhaps more honest response.

    LS400, you don't know what you are talking about, and you are giving out dangerous advice.
     
    Gordon Gekko likes this.
  10. PGF2016

    PGF2016 Frequent Poster

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    Is the crux of your argument that buying a property allows you to leverage someone else's money (the renter) to build up a pension pot? The alternative is funding it through your own money. In this case you've two sources of income working versus one.
     
  11. ixus

    ixus Frequent Poster

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    I see these discussion on here regularly and very rarely see any mention of how governments have recently raided pensions. Take Poland for example:

    https://www.bloomberg.com/news/arti...ents-in-need-raid-private-retirement-accounts

    It is a real risk. However, Auto-enrollment is inevitable when you look at the state of pensions here and the lobbying of vested interests.

    To the OP, what is your husbands employment position/earning bracket? Employee, self-employed, Director? High,medium,low earner?

    If say, he was a Director or high earner, he could avail of an executive Pension and plough a lot of earnings in tax efficiently. Potentially retire at 50/55 by winding up company.
     
  12. Dan Murray

    Dan Murray Frequent Poster

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    I've made the occasional provocative posts myself in the past - but LS400 seems to have the ability to troll at a far superior level. Many recent posts seem to be taking the sugar and salt rich confection for which Jacobs is renowned.
     
  13. cremeegg

    cremeegg Frequent Poster

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    moneybox likes this.
  14. PyritePete

    PyritePete Frequent Poster

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    i didnot understand yours in the first place
     
  15. Foodie1

    Foodie1 Registered User

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    I am reading all these replies with great interest and some confusion. My husband is on 80k, PAYE earner.
     
  16. Gordon Gekko

    Gordon Gekko Frequent Poster

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    I'll take a leap here and try and answer a question which you haven't made clear.

    - I modelled a scenario where a 43 year old on €50k could start a pension and end up with total pension income of €25k (i.e. State plus private) and €100k in the bank.

    - Separately, you or someone else asked what I do. I contribute €23k a year on a personal basis which is the maximum and isn't shy of €2k a month. That costs me €1,200 a month after tax but I view it as vital and worthwhile expenditure. I'd prefer to have the €1,200 in my back pocket, but such is life.
     
  17. PyritePete

    PyritePete Frequent Poster

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    Happy for you and I hope it works out. As I said earlier, I chose differently and I am comfortable with my decision.

    There's more than 1 way to skin a cat
     
  18. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Yes, but some ways are better than others. This "I'll invest myself because pensions don't make sense" stuff is dangerous nonsense. My worry is that someone will listen to it. The pensions crisis is bad enough without utter tripe like this being disseminated.
     
    trasneoir likes this.
  19. ixus

    ixus Frequent Poster

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    80k per annum
    Employer 3% = 2.4k

    Age range:

    40-49 Tax Relief 25%
    50-54 30%
    55-59 35%
    60+ 40%

    80k @25% = 20k.
    less 2.4k (employer)
    17.6K @40% relief = a cost of 7.04K to husband for 20K into pension.

    Start next year at 44 = 6 years of 20K @ cost of 7.04k = 120K pension @ 43.2k cost. (assuming no up or downside to investment or wages)

    50-54 @ 30%= cost of 8.64k per annum with 24k contributed = 120k @ 43.2k cost

    At 55, pension could be 240k from monthly contributions of 580 and 720 approx. Add another 128k from 55-59.

    (someone will correct me if calculations are incorrect)
     
  20. PyritePete

    PyritePete Frequent Poster

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    Yes some ways are better than others, mine ! And again, no its not nonsense. Its a matter of deciding what was/is best for people in their own situations.

    Why is the pension crisis bad enough ?

    Did you find out who said it being a great swindle ?