# 30 years old & no Pension !! Help.



## Calcutron (15 Oct 2007)

Hi All,

This is my first post here, I need advice.
I'm a 30 year old single (at the moment !) female who earns €70k per year. I bought my home last year & was saving for that for a few years, no never got my pension going.
I work in the private sector. I have about €2k from an old pension in a previous job, and although there's no pension in my current job, I negotiated with them to put aside 5% of my net take home pay per year that can be put into a pension when I get it set up. So I have a few grand sitting there for that as well.

I'm in the process of building my savings up again (500 PM into First Active), and paying a €1,200 pm mortgage as well, so don't know if its feasible for the next year or two to contribute much more than €200 per month.

I'd be interested in people's views as to what I should do.
And also, do you know if I can get that lump sum from my salary put in tax free when I start up my pension?

Thanks !


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## ClubMan (15 Oct 2007)

First off I don't think that you should be panicing about this if (as it seems) you are. Have you read up on pensions and the options available to you both here on _AAM _and elsewhere (e.g. www.PensionsBoard.ie, www.ItsYourMoney.ie etc.)?


Calcutron said:


> I'm in the process of building my savings up again (500 PM into First Active), and paying a €1,200 pm mortgage as well, so don't know if its feasible for the next year or two to contribute much more than €200 per month.


How come? €70K p.a. gross should be about €4K net p.m. Less €1,200 + €500 + €200 leaves €2,100. Where is this going?


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## Calcutron (15 Oct 2007)

Thanks Clubman.

Here's a quick lowdown of my outgoings per month:

Mortgage: €1,281
Mort prot: €29
Life Assure: €71
Savings First Active: €500
Savings C Union: €100
CCard payback: €350 (about €600 outstanding usually)
ESB: €40
NTL: €40
Car Ins/ Tax: €50
Gym: €60
Managment Fee for Apt: €150
I've no loans.

That's about it I think! Maybe I'm not managing my money as well as I should....
Maybe if I start clearing the card every month I'd have enough for a decent pension contributioin. For someone of my age/ salary, how much would you recommend?

Thanks !
C.


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## Carpenter (15 Oct 2007)

One question- why do you have life assurance in addition to mortgage protection (you are single with no dependents)?


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## ClubMan (15 Oct 2007)

Calcutron said:


> Mort prot: €29


Is this mortgage protection life assurance?


> Life Assure: €71


 Do you have dependents? If not do you really need this?

_Update: post crossed with Carpenter's._


> CCard payback: €350 (about €600 outstanding usually)


 Saving while carrying debt such as an outstanding credit card balance makes no sense. Use spare money to clear this and don't use the credit card as a source of medium/long term credit but rather as a cashflow management tool.


> I've no loans.


 The outstanding _CC _balance is a loan!


> That's about it I think! Maybe I'm not managing my money as well as I should....


 Have you read the _Money Makeover _and _Borrowing/Budgeting _etc. forums? They contain a wealth of useful tips for improving money management/budgeting etc.


> Maybe if I start clearing the card every month I'd have enough for a decent pension contributioin. For someone of my age/ salary, how much would you recommend?


 Impossible to say as it all depends on your specific circumstances and goals (e.g. for retirement age, income etc.).


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## Calcutron (15 Oct 2007)

Thanks for your replies on this Clubman & Carpenter - I will investigate exactly why I am paying life assurance. At the time it was sold to me as necessary. Thanks for the heads up.

The other point I was wondering about is this lump sum which my current company have been putting aside for me for the last 2 years waiting for me to set up a pension. If I want to put it all into a pension do I pay tax on it? ie: I have say €5k, what happens to it when I put it into my pension? How do you benefit from tax free nature of pension contributions if the money isn't coming directly from your monthly salary?

Sorry if that sounds confused....

Thanks !


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## ClubMan (15 Oct 2007)

Calcutron said:


> Thanks for your replies on this Clubman & Carpenter - I will investigate exactly why I am paying life assurance. At the time it was sold to me as necessary. Thanks for the heads up.


Mortgage protection life assurance is normally mandatory for owner occupier mortgage borrowers. However general life assurance is optional and totally unrelated to the mortgage. Of course perhaps you mean €21 for (optional) mortgage repayment protection insurance and €79 for mortgage protection (rather than general) life assurance? If so then €79 for a single mortgage holder in their 30s sounds pricey.

Mortgage Protection and Mortgage Repayment Protection Policies


> The other point I was wondering about is this lump sum which my current company have been putting aside for me for the last 2 years waiting for me to set up a pension.


Where is this money now?


> If I want to put it all into a pension do I pay tax on it? ie: I have say €5k, what happens to it when I put it into my pension? How do you benefit from tax free nature of pension contributions if the money isn't coming directly from your monthly salary?


In an occupational scheme (but not a _PRSA _or personal pension plan) only your personal/_AVC _contributions must be below your age related tax relief limits. Your employer contributions are not included here. As such your employer may be able to contribute the accumulated lump sum without you being hit for _BIK _tax/_PRSI _liabilities. However I'm not 100% sure and there may be some limits that kick in here. Somebody else may be able to comment more authoritatively.

You probably need to get some independent professional advice on the pension issue at least.


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## Calcutron (15 Oct 2007)

Thanks Clubman - where (or who) would be the best way to to get impartial advice?  As you've probably guessed, I'm a bit clueless about this & want to make sure I get the best option.

Thanks !


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## over2u (15 Oct 2007)

Use this link to calculate pension payments. Don't panic, lots of people your age would not dream of doing a pension- you are actually ahead of the possy.


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## over2u (15 Oct 2007)

Sorry here is the link http://www.pensionsboard.ie/pbcalc/pensioncalculator.asp


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## ClubMan (15 Oct 2007)

Calcutron said:


> Thanks Clubman - where (or who) would be the best way to to get impartial advice?


An authorised advisor or a good multi-agency intermediary - not tied agents (e.g. bank sales people). _IFSRA _can supply a list of registered intermediaries and some people have made specific recommendations here on _AAM _in various threads/forums. I would suggest that you might consider the likes of:

www.bond.ie / www.prsas.ie
www.myadviser.ie
www.labrokers.ie
www.ferga.com

and other similar discount brokers. Before contacting anybody you should probably read up on some of the material (e.g. on pensions etc.) here on _AAM _and on the sites that I mentioned earlier.


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## Sul (16 Oct 2007)

Hi,
   In relation to your question about putting lump sum into the pension from your savings there is no tax implications on it.

If your question is in relation to the tax relief, you can put a lump sum not exceeding 20% of your salary and get a tax relief for the current year. So for e.g somebody puts in 10,000 (assuming they are on the high tax bracket) the relief they get would be 41% + 6 = 47%. so the government is putting about half of the money for you in your pension.


In relation to life insurance issue, a single person with no dependents should have a basic level of life cover, but important cover is serious illness, In case of serious illness situation mortgage doesn't get paid off unless already arranged as part of mortgage protection, which in your case seems unlikely (premium of 29 seems to cover life only)


Hope this helps


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## Betsy Og (16 Oct 2007)

Sul said:


> Hi,
> So for e.g somebody puts in 10,000 (assuming they are on the high tax bracket) the relief they get would be 41% + 6 = 47%. so the government is putting about half of the money for you in your pension.


 
theres a technical issue here in that thats the relief you get if you pay through the payroll. If you make AVC's you get 41%, you can apply for the PRSI back (I've done this), but you cant get the health levy back. 

So you lose 2% by not contributing through the payroll. I've foregone the 2% to give myself the flexibility of deciding if I can afford a lump sum AVC contribution in advance of the deadline.


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