# Planning for old age / General Advice



## General_D (22 Oct 2013)

Hi All,

I'm just looking for general advice to see if I should be doing something that I'm not at the moment. 

  I’ve no assets or debts other than those outlined below e.g. No house / mortgage or car and No kids. 

Aim: is to be secure in my retirement. 

*Personal Details*
Age: 28 (and a half!)

Annual gross Income from employment or profession: Salary of €52,000 with bonus (not guaranteed was 3k last year). 

 Monthly take-home pay: €2,860.  

Type of employment: PAYE private sector same company 6 years.   
In general I am saving 

*Other *
Borrowings*:* none 

Do you pay off your full credit card balance each month? Yes balance is 0

Savings and investments: 30,000k savings in BOI Savings account and 375 prize bonds. Have been saving 1k a month since the last 12 months, before that I had more of a random saving pattern. 

*Pension*
Employers pay 3% into. I've only started contributing myself to it in the last few years. 
Currently the pension fund contributions are increasing each month with Employee 200.01 Employer 109.99. 
Current premium invested 8,194.00 
Current Fund worth 9,661.53

*Other:* Company pay my health insurance which I pay BIK on. I've also recently been Mortgage approved for up to 160k. I’m currently looking to purchase but in no rush/no house found yet so no immediate plans to draw down. This is to purchase a home I intend to live in long term and not for an investment. 

*What specific question do you have or what issues are of concern to you?*

General advice from others to see what I should be considering for my future.


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## Jim2007 (22 Oct 2013)

Why do you need to buy a house?  

Here is the thing, I live in Switzerland where buying a house is considered a rather silly thing to do, because it is considered a very high risk investment.  Which if you look at the statistics it is, in fact placing more than about 5 or 6 percent of your wealth in property leads to a high risk portfolio!

If you look back over what happened in recent times - people who invested in property are still sitting on negative equity waiting for things to change, people who invested in a typical low risk portfolio saw it loose about 35% of it's value during 2007/8, but has long since recovered and in fact has advanced well in the past year or so.

The typical Swiss individual hitting retirement does not own a house, but has assets of around 600K and a pension of about 70% of his final salary (from a DC pension).  So my advice - adapt a Germanic type approach to saving and investing rather that the typical Irish "Safe as Houses" style.


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## STEINER (22 Oct 2013)

Jim2007 said:


> I live in Switzerland where buying a house is considered a rather silly thing to do,
> 
> The typical Swiss individual hitting retirement does not own a house



Who owns Swiss residences? Banks? Foreigners?


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## Jim2007 (22 Oct 2013)

STEINER said:


> Who owns Swiss residences? Banks? Foreigners?



The pension funds are big holders of apartment blocks and so on, but they are held not as investments but as sources of income to meet pension payments each month.

Many Swiss people recently retired, move to the country side for 10 years or so , before moving back to the city later.  So farmers etc... often rent out apartments as well.

For easy access to medical services, shopping etc... may at around 80+ move to towns.


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## General_D (22 Oct 2013)

I'll edit my OP but to clear up something here the mortage approval for 160k I'm referring to is to buy a 3/4 bed house that will be my home and that I intend to live in long term. Its not as an investment.


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## General_D (22 Oct 2013)

Jim2007 said:


> Why do you need to buy a house?



Having rented for the best part of ten years I'd like a family home to provide stability and be able to call my own. I'd also like not having to share with others.


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## Joe_90 (22 Oct 2013)

What are yields like in other countries.  Is it that people can't afford to buy a house?

I own a house which I bought with my partner in 2002, we have paid our mortgage and now owe 35% of the current value.  In 7 years time will we have the mortgage paid off.  

If we had rented we would have paid the same amount of rent but would have to continue to do so indefinitely.  I accept that we took a risk but a calculated one I think.


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## Mrs Vimes (24 Oct 2013)

Jim2007 said:


> but they are held *not as investments *but as sources of income to meet pension payments each month.



Sorry, Jim, have to pick you up on this. How is a source of income from a capital outlay not an investment? It seems to me the very definition of an investment.


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## Macstuff (29 Oct 2013)

I don't think it's relevant to compare Switzerland to Ireland as from what I understand being a tenant in Switzerland is more secure than in Ireland and is therefore a more realistic long term option. For example, I am guessing that in the Swiss system you are better protected from large increases in rents etc. Here they can be increased much more easily, meaning that the tenant may have to move out if they can't pay. 
Going back to the original poster, I will share a piece of advice that I was given here years ago and which I think is relevant - he/she is doing all the right things now, saving making pension contributions etc. Keep doing that, but make sure to live life in the meantime. Strike a balance between saving for the future and living life in the now.


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