# How Much To Save?



## grotty (18 Jun 2008)

Hi Folks,

Apologies if this seems like a silly question, but I don't know how much money I should be saving.

I am on 70k, am single and have no dependents, I have 2 rooms rented out bringing in €800 a month. My mortgage is around €1400 a month.

I put €200 13 times a year into my pension. 

I have no car repayments, or loans of any sort. My credit card bill is around 1500 a month, I clear it month by month.

I dont have a specific goal in mind for my savings, but I feel I should be saving, it's just that I'm not sure how much I should be saving. 

Could anyone please give me some pointers?


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## becky (18 Jun 2008)

A lot more than €200 especially on that salary.  If I was you I'd be saving at least a €1000 maybe a bit more.


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## rmelly (18 Jun 2008)

Can you give a breakdown of what the Credit Card bills entail - €1500 per month sounds excessive - do you pay all your bills (gas, electricity, tv), food, entertainment, petrol etc. through CC?

If is all disposable income spending (entertainment, ebay purchases etc), then you seriously need to review it.


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## Kemo_Sabe (18 Jun 2008)

before anything else.....you should be putting the absolute max into your pension - if you are over 30, this would be 20% i.e. 14k p.a. or about 1,166 p/m

it's tax-free saving, do it! absolute no-brainer

once you've changed to this, *start* thinking about other forms of saving


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## Daithi7 (18 Jun 2008)

Kemo_Sabe said:


> before anything else.....you should be putting the absolute max into your pension - if you are over 30, this would be 20% i.e. 14k p.a. or about 1,166 p/m
> 
> it's tax-free saving, do it! absolute no-brainer
> 
> once you've changed to this, *start* thinking about other forms of saving


 
Pensions are not a tax free investment, Pensions are a tax deferred investment i.e. you pay tax on 3/4 of it on realising it. Furthermore you pay fund and admin costs in it, have no access to your cash until you're 60+ and generally they're pigs of investments that trade on people's ignorance and/or indifference to taking a more active role in their financial management. Buyer Beware!


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## Kemo_Sabe (18 Jun 2008)

Daithi7 said:


> Pensions are not a tax free investment, Pensions are a tax deferred investment i.e. *you pay tax on 3/4 of it on realising it*. Furthermore you pay fund and admin costs in it, have no access to your cash until you're 60+ and generally they're pigs of investments that trade on people's ignorance and/or indifference to taking a more active role in their financial management. Buyer Beware!


 
can you please provide a reputable link to back up this claim? Thank you


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## NavanMan1 (18 Jun 2008)

grotty said:


> Hi Folks,
> 
> Apologies if this seems like a silly question, but I don't know how much money I should be saving.
> 
> ...


 
Hi Grotty,
As your single, just wondering if your female ?


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## oldtimer (18 Jun 2008)

Well said Daithi7. I am sick of hearing ''putting money into pensions is a no-brainer, better than SSIA etc etc.'' I paid into an AVC for several years. I am now retired and over 60. Everytime I draw money out of my AVC I am taxed on it and pay admin and fund management costs. True I got max tax relief while working because I was on the 41% tax rate, nevertheless, I am now paying back some of that. Also, I have to watch the amount I withdraw annually as I could end up in the higher tax bracket. So to say contributing to pensions is a tax free investments is simply not true.


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## eileen alana (18 Jun 2008)

Daithi7 said:


> Pensions are not a tax free investment, Pensions are a tax deferred investment i.e. *you pay tax on 3/4 of it on realising it*. Furthermore you pay fund and admin costs in it, have no access to your cash until you're 60+ and generally they're pigs of investments that trade on people's ignorance and/or indifference to taking a more active role in their financial management. Buyer Beware!


 
Is this true??


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## Daithi7 (18 Jun 2008)

Kemo_Sabe said:


> can you please provide a reputable link to back up this claim? Thank you


 
Yes, check out revenue.ie and look up pensions.

roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains. 

Then when you retire you are allowed take 1/4 of fund tax free under current tax legislation and the other 3/4's has to go into an ARF which also incurs admin and management charges as Old Timer points out
, and then you pay tax at the appropriate rate when drawing down from this.

So Pensions are merely 3/4 deferred taxation (with management charges) and to my eye are for suckers!!


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## Daithi7 (18 Jun 2008)

Prescribed reading if you want to save yourself a lot of pain and heartache investing in funds and by implication pension funds.

http://www.investorschronicle.co.uk/Columnists/NoFreeLunch/article/20080618/f18c65f8-3d1b-11dd-8628-0015171400aa/Irrational-exuberance.jsp?rale=OrXXPvISbpzEd%2BH2K5w72HDqg55Q%2FoCkKAGmUhGcfuZqSW83svjzsBqDNjE9ZOO4HIBkVvy9Wyf%2B%0AgUYBgbNKICvZOjy%2B5jsexlxW9UCDxP%2BAaZjg5Ne2CDAXVQHMDhPwvtXNO2WC9BioRx6f7SXsJggH%0AAdiqikOIJ84PSXBM4ScH81uH2cSbB7VvhFcDyNfW%2FRsk4tLIgegU%2F7pGOHxub60kO17Rh57gj7Jk%0Ac1GCeRnhTq18zKwhmvTPjKmIYOrpApoJ%2FoLd3m0KmYPA4Hl0v%2F0dmfDfZowKoIJMO%2Fgn6iOkYoiV%0APTm0XUiTyqzZdvQZ4iNJwuDOmywE4mMfoJyFrsdNepXrYRg%2Fr9s3pjS0G0e6q7Iju%2BsTwGCXBePr%0AA9tnL3pTdqwUdUa3VoYw24XWEg%3D%3D


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## eileen alana (18 Jun 2008)

Daithi7 said:


> Yes, check out revenue.ie and look up pensions.
> 
> roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
> 
> ...


 

So what is your alternative to saving for retirement? 
Deposit accounts not much use since inflation is eating away at one's savings.


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## DELLBOY 08 (18 Jun 2008)

Daithi7 said:


> Yes, check out revenue.ie and look up pensions.
> 
> roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
> 
> ...



My employer matches the contributions I make which doubles the investment at no extra cost to me. How does this make me a sucker?


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## grotty (19 Jun 2008)

NavanMan1 - yes I'm Female.

rmelly - Credit card is a mix of descretionary spending and paying bills etc. I don't seem to monitor/manage my spending at all now, when I was on a lower salary I would have.


Also on the topic of pensions - I have a defined benefit pension, so if that is the case does it make sense to put away more, my understanding is that I would just get the same "Defined Benefit" come retirement time?

Kemo_Sabe - I'm under 30

Thanks for your responses so far!


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## putsch (19 Jun 2008)

It sounds to me as if you are v well provided for - you have a defined benefit pension for your retirement income, your house is being paid for, you have some savings for an emergency or rainyday (possibly you're in the public sector as otherwise DB schemes are rare so you should also pay into an income continuance scheme in case of long term illness). Saving more would only provide a bonanza for your beneficiaries (a long time hence!). 

Use your excess money as you wish e.g. if privacy is important to you let the tenants go/if you enjoy art start to buy young artists/have great holidays/contribute to charity etc etc.

Once the fundamentals on security are in place life is for living.


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## sam h (19 Jun 2008)

> grotty
> Posts: 25
> 
> 
> ...


 
So NavanMan, are you asking her out??  Could this lead to the first AAM wedding?


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## Kemo_Sabe (19 Jun 2008)

Daithi7 said:


> Yes, check out revenue.ie and look up pensions.
> 
> roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
> 
> ...


 
this is total nonsense


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## DELLBOY 08 (19 Jun 2008)

Daithi7 said:


> Yes, check out revenue.ie and look up pensions.
> 
> roughly goes like this, when you invest in a pension you get tax relief at the top rate (assuming you have those type of earnings), and then you build up your pension in an approved fund or funds with no CGT on any gains made. However charges are significant here and often take the gloss off any gains.
> 
> ...



You shouldn't be offering advise to people with genuine queries when you haven't got a clue


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## LDFerguson (19 Jun 2008)

The notion that pensions are not an efficient form of saving has been debated here before.  Here's another example.  

Let's have a few FACTS: - 


The majority of people pay 20% tax in retirement.  When you build up a pension fund, you get a tax-free lump sum in retirement.  Often, this is 25% of the fund.  In Occupational Pension Schemes, it might be more.  Let's assume it's 25%.  So if you get 25% of your fund tax free and the balance is taxed at 20% (less tax credits), let's say your average tax rate on your pension fund withdrawals is therefore 15%.  So you get 41% tax relief going in and pay 15% tax coming out.  Explain to me why this is for suckers.
At present, tax exemption limit for a married couple where one partner is over 65 is €40,000.  So if your total pension and other income is €40,000 or less, you pay no tax at all.  If this is your situation, you could get 41% tax relief going in and pay no tax coming out.  Still think pensions are for suckers?
As has been mentioned, a pension fund pays no CGT on gains made on investments.
Of course management charges apply.  I've never come across a form of investment where the operator works for free.  There are countless threads here on Askaboutmoney where you can find examples of where you can invest your pension fund so that the total annual charge is around 1%.  With the amount of information that's out there, if you end up paying into a pension that imposes uncompetitive charges, you obviously didn't bother to do your homework.


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## sam h (19 Jun 2008)

Fair play Liam, a nice clear explaination.


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## eileen alana (19 Jun 2008)

Thank you for that Liam


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## WaterSprite (19 Jun 2008)

Well, saying that pensions are for suckers is a little extreme...

But there is definitely a mis-conception out there that pension money is totally tax-free, which (all of it) definitely isn't.  Liam's example also assumes that the pension holder has a spouse, which of course may not necessarily be the case (although with the budding romance between Kemo-Sabe and grotty, you never know!)

As well as not being tax free, pensions are also obviously only available once you hit a certain age (some schemes allow you to take out limited portions at various ages, from 55 I think) and that's a significant limitation, particularly if you want to try to retire early.  If you want to do that, then an investment that will pay out after a certain time but is not dependent on your own age may be a good thing to add to the mix.

Grotty, you should certainly be "saving" more than 200 a month - in order to ease yourself into it and really see what affect it has on your disposable income/lifestyle, perhaps increase by 100/200 a month each 6 months or so?  You could open a regular saver account and get those lovely high interest rates and, if you do fancy putting some into your pension, you can make a contribution at year end and get the tax back on the lump sum contribution.  Ideally, you'd want to put more than 200 a month into your pension in any case, particularly if you have the disposable income, which you certainly seem to do.  

I'd just question whether or not to "save" all your money into the pension scheme *if* it doesn't leave you room for other investments.  Once your regular saving nest egg accumulates, you can think about other investments to bring in a return separate from your pension.

Sounds like you have it all sorted though - it's a nice quandry to be in

Sprite


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## Daithi7 (19 Jun 2008)

LDFerguson said:


> The notion that pensions are not an efficient form of saving has been debated here before. Here's another example.
> 
> Let's have a few FACTS: -
> 
> ...


 
Well a few facts are welcome:

1. Pension funds are under performing lemons by and large. In the last 10 years most of them have accumulated about 2% p.a. net growth - so try matching inflation with that!?! ( I am a former pension trustee for a large enough company and know the pain this inflicted on us)

2. You pay a management charge on your money right from day 1 to the day you die!!!- this adds up. Very few pay 1% or less Liam, much more likely to incur 1-2.5%- 3.5% on entry (and/or changing funds) and 1.5%+ p.a. on going management

3. You do not have access to your money in case of a life emergency or whatever until you are 60+

4. If an employer is matching your fund input that obviously improves the business case for one but since many people have this, the economics and market are geared for that subsidisation - so conversely if you are not receiving that subsidy then it probably will not pay for you.

5. Any sane person over the past 10-15 years who put their pension contribution amount towards a mortgage for a buy to let would be way ahead right now. Furthermore they would now be half way to owning a debt free income producing asset that will yield income that will increase roughly with the CPI (i.e. as rents rise) well into retirement. 

If they ever hit a life event that needs funds they may even opt to remortgage the property at that stage to fund this thereby using their 'savings asset' to help them live life with the security of having some access to their savings.

Then on death they can pass the asset on to spouse or siblings. 

Argrument over.


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## LDFerguson (19 Jun 2008)

Daithi7 said:


> 1. Pension funds are under performing lemons by and large. In the last 10 years most of them have accumulated about 2% p.a. net growth - so try matching inflation with that!?! ( I am a former pension trustee for a large enough company and know the pain this inflicted on us)


 
You're being selective about your choice of time period to try to further your argument.  *Average *Irish Managed Pension fund returned 6.3% per annum over 11 years, 7.6% over 12 years, 8.7% over 13 years etc.  These being averages, obviously better ones did better than this.  

Recent stock-market events have of course dragged down all averages.  A recovery will drag them back up again.  



Daithi7 said:


> 2. You pay a management charge on your money right from day 1 to the day you die!!!- this adds up. Very few pay 1% or less Liam, much more likely to incur 1-2.5%- 3.5% on entry (and/or changing funds) and 1.5%+ p.a. on going management


 
If someone is reading this on Askaboutmoney, then they have the information to hand to obtain 1% charges, so why wouldn't they?

You use the example of property purchase as an alternative.  Much higher initial outlay (paid out of after-tax income), legal costs, Stamp Duty, income tax at marginal rate on rent, property management charges, property maintenance costs, void periods where you have to pay the mortgage but have no tenants, CGT on disposal, more legal costs on disposal, auctioneer fees on disposal...need I go on?  I won't even get started on the time cost of property ownership.    




Daithi7 said:


> 3. You do not have access to your money in case of a life emergency or whatever until you are 60+


 
True.    



Daithi7 said:


> 4. If an employer is matching your fund input that obviously improves the business case for one but since many people have this, the economics and market are geared for that subsidisation - so conversely if you are not receiving that subsidy then it probably will not pay for you.


 
This point makes no sense.  If your employer pays money into your pension, they pay money into your pension.  It's tax and PRSI-efficient for the employer and there are no BIK implications for you.  Are you trying to say that this is a bad thing?    



Daithi7 said:


> 5. Any sane person over the past 10-15 years who put their pension contribution amount towards a mortgage for a buy to let would be way ahead right now. Furthermore they would now be half way to owning a debt free income producing asset that will yield income that will increase roughly with the CPI (i.e. as rents rise) well into retirement.


 
Tax inefficiency of this as well as the multitude of other disadvantages already dealt with in 2 above.   



Daithi7 said:


> If they ever hit a life event that needs funds they may even opt to remortgage the property at that stage to fund this thereby using their 'savings asset' to help them live life with the security of having some access to their savings.


 
Nobody should put all their savings into their pension plan.  They should keep funds aside for emergencies.  



Daithi7 said:


> Then on death they can pass the asset on to spouse or siblings.


 
As they can do with an Approved Retirement Fund.   



Daithi7 said:


> Argrument over.


 
*Now* the argument's over.


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## Daithi7 (19 Jun 2008)

Hey Liam,

Check out table below for 10 year performance of pension funds: from http://www.finfacts.ie/fincentre/irishpenfunds.htm

*Group Pension Managed Fund Returns to 30 April 2008*​ 
*1 Month*​ 
*%*
*4 Months*​ 
*%*
*1 Year*
*%*
*3 Years*
*% p.a.*
*5 Years*
*% p.a.*
*10 Years*
*% p.a.*
AIB Investment Managers
4.5
-7.9
-10.4
8.9
9.9
3.3
Bank of Ireland Asset Management
4.2
-7.0
-15.4
3.3
6.6
4.1
Canada Life/Setanta
3.0
-6.8
-10.5
5.5
8.4
3.1
Eagle Star
4.4
-7.3
-10.0
8.8
10.4
4.2
Friends First/F&C
4.8
-9.8
-14.6
6.1
8.5
3.1
Hibernian Investment Managers
4.5
-7.7
-12.1
7.0
9.1
3.8
Irish Life Investment Managers
3.9
-7.6
-12.6
7.1
9.8
4.0
KBC Asset Management
4.7
-8.1
-15.0
6.1
7.8
2.5
Oppenheim Investment Managers
2.9
-7.5
-10.9
7.3
9.0
5.3
Standard Life Investments
5.1
-7.2
-14.5
7.6
9.3
3.1
*Average*
*4.2*
*-7.7*
*-12.6*
*6.8*
*8.9*
*3.7*​ 

That's an average of 3.7% p.a. return over 10 years. And I bet that does not even take into account the entry cost (normally between 1.5-2.5% and may not even take into account the ongoing management costs).

Secondly, my point about employer contributions are clear to most people I'd say, unless of course they work in the pension business that is: since the market is aimed at selling pensions to people who normally get employer contributions that it is not necessarily that competitive for people who don't. Simple. Everyone knows about the fat charges and up front commissions at this stage and they eat into everyone's net return but most particularly into someone like we have here who will be stumping up the cash to invest themselves.

A Buy to Let investment hammered a pension investment in Ireland for the past 10, 15 and 20 years. That's cos pensions tend to be poxy investments that exploit the tax and employer incentives in Ireland to excuse underlying crappy returns that hardly even keep pace with inflation.

Argument well and truly over.


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## LDFerguson (19 Jun 2008)

Don't know why you insist on repeating arguments after I've already disproven them.


Already dealt with your use of 10-year figures.  See point 1 above.
I work in the pensions business and the mortgage business so it makes no difference to me whether people buy property or pensions.
Your suggestion that schemes which feature employer contributions somehow suffer worse charges than those which don't is simply not true.
There are pension arrangements out there which feature uncompetitive charging structures.  There are others which feature competitive charging structures.  The information you need to distinguish between the two is available here and in plenty of other places if you take the time to look.  It's simply a gross over-generalisation to label an entire industry as bad value simply because there are bad value products available in it.  If you buy a car and it turns out to be unreliable and uneconomical, do you then decide you're never going to buy a car again because cars are unreliable and uneconomical?



> Everyone knows about the fat charges and up front commissions at this stage and they eat into everyone's net return...


 
Nobody should invest in a pension product with fat charges or up front commissions.  



> A Buy to Let investment hammered a pension investment in Ireland for the past 10, 15 and 20 years.


 
That's a very impressive statement.  Can you back it up with any evidence, like figures?  Obviously any meaningful comparison would have to take account of borrowing, initial outlay (paid out of after-tax income), legal costs, Stamp Duty, income tax at marginal rate on rent, property management charges, property maintenance costs, void periods where one had to pay the mortgage but had no tenants, CGT on disposal, more legal costs on disposal, auctioneer fees on disposal etc. etc.   



> Argument well and truly over.


 
It is now.


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## rmelly (19 Jun 2008)

So how much should the OP be saving?


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## Daithi7 (19 Jun 2008)

Liam,

10 year figures are not selective they are a recognised way to measure any investment.

It figures you work in the pensions business only someone in it would try to defend the numbers.

Re comparing buy to let versus pensions over the last 10 years: easy. Most people here can probably compare the difference in return they received on their buy to lets against the endless vacuum that was their pension for the last 10 years and lets face it, no snake oil salesman would try to convince them of a revision of such recent history - would they!?


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## GeneralZod (19 Jun 2008)

Daithi7. Well done to you sir.

I'm one of the unfortunates that started his pension 10 years ago exactly and can vouch for the terrible performance. I'll give the AVCs another 4 years. If the recovery hasn't kicked in by then to establish a better long term average I'm going to stop the AVCs, pay all the income tax up front and take more direct control. I'll continue with the employer and compulsory employee elements. I'm already making long term savings outside of the pension and its doing better just by keeping it in savings accounts pending the recovery of the stock markets.

Right at the end, 55+, if I'm still working,  I'll load up the AVCs again if it's clearer that I'll be able to withdraw them at 20% tax. Hopefully the pension fund won't erode too much of my contributions during those 5 years.


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## LDFerguson (19 Jun 2008)

I repeat...



> I work in the pensions business and the mortgage business so it makes no difference to me whether people buy property or pensions.


 


> That's a very impressive statement. Can you back it up with any evidence, like figures? Obviously any meaningful comparison would have to take account of borrowing, initial outlay (paid out of after-tax income), legal costs, Stamp Duty, income tax at marginal rate on rent, property management charges, property maintenance costs, void periods where one had to pay the mortgage but had no tenants, CGT on disposal, more legal costs on disposal, auctioneer fees on disposal etc. etc.


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## LDFerguson (19 Jun 2008)

Daithi7 said:


> 10 year figures are not selective they are a recognised way to measure any investment.


 
Recognised by who?

They are only relevant if your investment timeframe is 10 years.  If I've got a 20 year timeframe, I've no interest if a short-term dip has dragged the 10 year average performance down.


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## Colblimp (19 Jun 2008)

rmelly said:


> So how much should the OP be saving?



In my humble opinion, for what it's worth, as much as he/she can realistically afford...


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## Bronte (20 Jun 2008)

Liam doesn't the 10 year dip or 30 year dip seriously affect people who are at retirement age and compulsorily have to buy an annuity (or what ever it's called)? Also do you know what percentage of people actually only pay 1% charges, I bet it's very low.

Seriously good debate though - Liam and Daithi, especially as the language of such a complex issue is so difficult.

The best advantage to pensions in my opinion is that at least the people who have them will have some extra income in retirement and even if the returns aren't great, it's certainly better than just the state pension, especially as there are plenty of people who do not know how to handle money so it's actually better that it's locked away. 

The best advice is to have diversity - property, pension and savings. 

OP - On your salary 1/3 savings/investments 1/3 spending and 1/3 mortgage, and you really ought to know where your money is going.


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## LDFerguson (20 Jun 2008)

Bronte said:


> Liam doesn't the 10 year dip or 30 year dip seriously affect people who are at retirement age and compulsorily have to buy an annuity (or what ever it's called)?


 
If someone is still invested in equity or property-based funds immediately prior to retirement, then the recent dip definitely causes them a problem - they either defer their retirement or retire now and suffer a very real loss in their annual pension. Either option is nasty. 

This is why it is SO important for people to review their pension funding (or employ someone to do so) every few years, especially as they approach 10 - 15 years to retirement itself. They should be considering switching into low risk funds to avoid their retirement coinciding with a cyclical dip in the fund value.



Bronte said:


> Also do you know what percentage of people actually only pay 1% charges, I bet it's very low.


 
I don't know but I'd be inclined to agree with you - it probably is a very low percentage. 

But the people that have found their way to Askaboutmoney.com now have all the information readily available to make sure they don't buy a pension product with uncompetitive charges ever again. This is why I don't agree with an argument here on this board of all places about "fat charges and up front commissions" being used to support the wild generalisation that "pensions are for suckers".


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## ClubMan (20 Jun 2008)

rmelly said:


> So how much should the OP be saving?


As much as they realistically need to fund their short, medium and long term plans/goals whatever these are. Asking how much should be saved per se is meaningless. It only makes sense when considered in the context of the individual's overall financial/personal circumstances and with some knowledge of their short, medium and long term plans.


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## Daithi7 (20 Jun 2008)

_Moderator note: Rant deleted._



> rant over.


 
Daithi

Please don't drag the thread off-topic with your rant.  by all means feel free to start a new thread on the general issue.

Brendan


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## grotty (20 Jun 2008)

ClubMan - thanks for the reply, I think you may have hit the nail on the head, I don't have any goals set at the moment, that I would need to save for.

I suppose I just don't want to be flittering money away just because I don't have the forsight to have goals set at this stage.

I will start to think what I might need money for in the future, and that might point me in the right direction.And until I have an idea of goals, Bronte I will give your suggestion a go! 

Thanks all


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## LDFerguson (20 Jun 2008)

grotty said:


> ClubMan - thanks for the reply, I think you may have hit the nail on the head, I don't have any goals set at the moment, that I would need to save for.
> 
> I suppose I just don't want to be flittering money away just because I don't have the forsight to have goals set at this stage.
> 
> ...


 
One very basic piece of financial advice that is nonetheless very effective is to keep a Money Diary for a month.  Buy a small notebook that you can carry in your pocket.  Carry it everywhere with you for a month and write every single purchase into it, down to your newspaper.  Then at the end of the day or week, transfer your scribbled notes onto a spreadsheet on your computer, with itemised lists of your spending, e.g. newspapers, groceries, coffees etc.  You may well be surprised at how much you're spending on things you didn't really think about.  It's a good place to start a plan.


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## ClubMan (20 Jun 2008)

The www.itsyourmoney.ie consumer guides (e.g. the savings & investments one here) are a good way to get an idea of the sort of things to consider when attempting to identify/clarify your short, medium and long term plans and the concomitant financial requirements. They even pose the same question as this specific thread:

How much do you need to save?


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## Daithi7 (20 Jun 2008)

Daithi7 said:


> _Moderator note: Rant deleted._
> 
> 
> 
> ...


 
Apologies Mod,

I presumed since it included that my accountant advised me against ever buying a pension 12 years ago and that I consider it to be the single best piece of financial advice that I ever received that it was in some way relevant.

D


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## Daithi7 (11 Feb 2009)

LDFerguson said:


> Recognised by who?
> 
> They are only relevant if your investment timeframe is 10 years. If I've got a 20 year timeframe, I've no interest if a short-term dip has dragged the 10 year average performance down.


 
Liam, 

Charlie Fell who writes in the Irish Times quoted a chilling fact the other week. Stocks or equities have now underperformed government bonds over the past 20 years i.e. stocks have now underperformed the relative risk free baseline of bonds over 20 years. The obvious implication of this is why risk it in funds when you can buy government backed bonds that outperform these fee generating devices over 20 years???

article here [broken link removed]

p.s. pension funds charge entry and management charges so the likelyhood is that these have now significantly underperformed a risk free baseline investment over 20 years i.e. ones pension would have been better off in cash or bonds for the past 20 years!!


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## Daithi7 (11 Feb 2009)

One more re paltry performance of pension funds
http://www.independent.ie/business/...lost-836427bn-in-value-last-year-1593824.html


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## D8Lady (11 Feb 2009)

To actually answer the original query, it is generally recommended that you have 3 to 6 months expenses easily accessible to you. This is in case of job loss / medical emergency / family emergency / house repairs. 
Have a separate fun fund for holidays, weekend away, concerts, flying lessons, scuba diving or whatever you are into.


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