42 - no pension software contractor - just getting by

My husband is 42 and doesn't have a pension. He keeps putting off getting advice because he's afraid of looking foolish and also is worried the contributions will be too high for him. He is a software contractor and i'm a housewife - we're just getting by.
Should he invest or get a pension?
Where can we get independant advice in the Mid-West? He keeps talking about going to a pension adviser but i'm not sure this is the way to go.
I'm worried about our future so any advice would be much appreciated.

Re: 42 - no pension

Hi Mrs Crea

A couple of pointers:

• "Afraid of looking foolish" - that is like me being afraid to employ an IT person because I am afraid that the person will know more about IT than I do, now that is foolish!
• "Worried the contributions will be too high" - he can contribute as much or as little as he likes, so there is no set amount that will be "too high", the more he delays in starting the pension, the more difficult he will make it for himself to build up a decent sized pension
• If he can invest for the longer term - i.e. will not be looking to take his cash back before he is, say, 60 - then pension investing may be better than other forms of investing, because of the tax breaks that accompany pension investments
• IFSRA can give you the list of "Authorised Advisers" - these would be advisers that will advise on the full range of investment options - usually best to employ one of these on a fee basis, NOT a commission basis

Re: 42 - no pension

By way of encouragement, don't think of it as a pension, think of it as a means of accessing a very generous tax break.

All pension contributions will receive tax relief at your husband's marginal rate of income tax + reflief from 2% PRSI, giving 44% relief in total. Unless he makes very significant contributions from here on, the pension payable will be so low as to not attract income tax / attract very little income tax when it comes into payment.

Psychologically, rather than focussing on any pension income level, he should focus on contributing as much as possible in the knowledge that it is highly tax efficient.

Turns the disadvantage of starting late into an advantage!

Re: 42 - no pension

CapitalCCC said:

Hi Mrs Crea

A couple of pointers:

• "Afraid of looking foolish" - that is like me being afraid to employ an IT person because I am afraid that the person will know more about IT than I do, now that is foolish!
• "Worried the contributions will be too high" - he can contribute as much or as little as he likes, so there is no set amount that will be "too high", the more he delays in starting the pension, the more difficult he will make it for himself to build up a decent sized pension
• If he can invest for the longer term - i.e. will not be looking to take his cash back before he is, say, 60 - then pension investing may be better than other forms of investing, because of the tax breaks that accompany pension investments
• IFSRA can give you the list of "Authorised Advisers" - these would be advisers that will advise on the full range of investment options - usually best to employ one of these on a fee basis, NOT a commission basis

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Trust me - I know that his feelings don't make alot of sense.
I'll get on to the IFSRA though. I don't want to get someone with a vested interest in selling him something.

Re: 42 - no pension

Have a read of the AAM and IFSRA guides to savings and investments and pensions. And some of the other key posts/topics here to get an idea of the sorts of things to consider. Useful to prepare yourselves for dealing with an independent advisor too.