# How is the Ordinary Joe to fund his retirement?



## Firefly (18 May 2011)

I don't mean this as a rant, hence posting it in the GFD's. It seemed a lot easier for the Ordinary Joe in the past to fund their retirement. Anyone who was hardworking & sensible with their moneywould have set up a pension & saved some cash. No big deal. Others who did a bit better picked up one or two properties. No big deal either. Now....Pensions are being hit by the levy (who knows for how long and whether the rate will increase). The safety of Irish deposits is the topic of much speculation. Investment properties are being hit for the annual NPPPR charge of 200 euro which may also increase, along with potential water charges etc and reduced mortgage interest relief. (I'd rather not get into whether these reliefs are justified or not, but whatever the view, the reduction of relief is a cost to the owners).

There are some posters here who are well versed in finance and investments. For most ordinary workers though this level of expertise is beyond reach and the costs too high for the amounts concerned. 

So, my question is fairly simple...where is an Ordinary Joe expected to put his money for retirement?


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## NHG (18 May 2011)

and ordinary Joe probably did'nt even get to avail of tax relief at 41% as he was lucky if he was earning enough to be in the 20% tax rate!


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## Firefly (18 May 2011)

NHG said:


> and ordinary Joe probably did'nt even get to avail of tax relief at 41% as he was lucky if he was earning enough to be in the 21% tax rate!



Even still....the money put away was relatively "safe" just a smaller amount. Now where does he put it?


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## z107 (18 May 2011)

> Now where does he put it?


Somewhere that meets this criteria:


Out of reach of the Irish Government.
Somewhere it will at least retain its value (keeping up with inflation).
Not a bubble, pyramid scheme, scam or something about to collapse.


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## Chris (19 May 2011)

I agree with umop3p!sdn, especially on the first point. Now I do have a private pension here and I will continue contributing in order to get my employer's contribution, but I certainly will not be making any AVCs.
Personally I look after my own investments and only use funds to a small degree, usually to pay in small monthly amounts to build up to a level that makes a share purchase viable.
The vast majority of investments for my child's education and my retirement are outside the country, since around the time that the crisis first began. For the foreseeable future I do not plan on repatriating them. While I do not get any tax relief on these investments it does give me great flexibility when it comes to actually retiring. I will obviously owe CGT on any gains, but at that stage I hope to be in a position to move to a country with the lowest CGT rates.


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## Firefly (19 May 2011)

Hi Chris,

I don't doubt your strategy and I too have taken steps to secure my own reserves. But for the Ordinary Joe it seems there are very few (if any) simple options. By simple I mean things that would have always  been taken for granted before now...ie putting your money in an Irish bank and contributing to a pension. All that many can hope for is some return to economic growth so the government can leave assets alone.


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## JoeB (19 May 2011)

Gold ownership perhaps, or other commodities.

I know that gold is a little bubbly now, but it may still be undervalued. It's out of reach of the Irish Gov,. and has always been considered a good store of value, but not a productive one. Some people say that it's a disastorous investment for long term, but it is an option. It's easy to buy now through places like BullionVault, even in small quantities.


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## Firefly (19 May 2011)

JoeBallantin said:


> Gold ownership perhaps, or other commodities.
> 
> I know that gold is a little bubbly now, but it may still be undervalued. It's out of reach of the Irish Gov,. and has always been considered a good store of value, but not a productive one. Some people say that it's a disastorous investment for long term, but it is an option. It's easy to buy now through places like BullionVault, even in small quantities.



That's true. OK we have one option: Gold (and other commodities)....


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## Protocol (26 May 2011)

Social Insurance?


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## Jim2007 (26 May 2011)

Firefly said:


> So, my question is fairly simple...where is an Ordinary Joe expected to put his money for retirement?



My bet is on Ordinary Joe will do just fine!  He is oblivious to the most what is discussed here and he will keep on doing what he is doing and as a result he will ride out the downturn and be there to take advantage of the upturn next time around.

The reality is that we are the biggest danger to our own financial well being because we let our emotions drive our investment decisions.  To my mind nothing has changed, its just that some of us have become aware of the risks for the first time!  So the tools for dealing with it have not changed - diversification to avoid risk and a good asset allocation to ensure best returns from your portfolio.

By all means move some of your assets out of Ireland as a diversification strategy, but remember that at some point there will be a recovery in Ireland and when it does come it is likely to be much better that the rest of Europe, so don't miss it be divesting completely!

And when it comes to levies and taxes on pension funds, first realise that the figures involved are peanuts in terms of the amount you are still gaining from tax concessions and so on.  And in European terms you are still way ahead of us on that side.  On top of that realise that the IMF and the ECB are there to see an orderly return to financial well being and although it is going to be tight for a long time, allowing the government to make a grab for pensions or savings would not fly with these guys.

Jim.


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