To maintain their standard of living in retirement.
You misread my example. Anyone who manages to put away €300,000 between ages 40 and 50, will surely continue to make sizeable contributions beyond age 50, and most likely also for a number of years prior to then.If they had a fund of €300k - they would need to survive on an income of about €10k!!
I think they may be better off investing over the longer-term, what if for some reason or other the person fell ill in their 50s...bang goes any chance of making their contributions in the 50s.
...I was with a relative over the weekend who is paying over €30k per annum to share a room in a nursing home, so in that person's case I am quite sure a pension of 2/3 of salary would be very important.
Defined Benefit Pension Schemes in Ireland and the UK have been designed around the target 2/3rds of salary for in excess of 50 years, so it is a very widely recognised rule of thumb - obviously everyone's situation will differ...all Civil Servants in Ireland are in pension schemes based around this universally accepted target of 2/3.
Most people who fall in their 50s are unfortunately unlikely to need long-term nursing care in their old age. The average nursing home patient only lives a further 2-3 years from the date they first need such care.
Which is presumably not unconnected to the suspicion amongst economists and financial experts that such schemes are financially unsustainable for both the State exchequer and for private sector employers. - So much so that Defined Benefit Schemes are now largely a thing of the past in the private sector.
would not like to save for retirement banking on the prospect of dying quickly once I retire!!
None of these commentators have ever once mentioned - your notion - that it is because these people are over-saving for retirement
My point was in relation to the private sector. Defined benefit schemes ARE largely a thing of the past in the private sector - at least new ones.note that over 50% of Irish occupational pension scheme assets belong to defined benefit pension schemes, they are far from a thing of the past
So? That doesn't mean that they are or are not sustainable. In fact it could be an explanation as to why DB pensions have survived so far in the public sector despite the fall in their popularity in the private sectorPublic sector pensions are not funded schemes - they have no assets included in surveys of occupational pension scheme assets - they are funded on a pay as you go basis.
How many?I know a number of people with pensions in excess of €100k and they do not feel that their pension income is excessive.
Again, so? It quite obvious that for legacy reasons, this would be the case. For example the troublesome ESB scheme, I would imagine, was set up donkeys years ago.[*]So they are not included in the survey of assets of Irish occupational pension schemes showing that over 50% are DB assets
Are they representative, in terms of income and assets, of the general population? What age on average were they when they paid off their domestic mortgages?[*]About 80 or 90
You are the first person that I have heard in a long time implying that we are saving too much, it's refreshing!
In relation to pensioners on higher pensions, they would all have contributed to their pension over a long period - and that is what I am advocating as a general rule of thumb.
You said that nobody needed a pension of €67K - I said I know a lot of people on a higher pension than that and that they need it.
are they representative, in terms of income and assets, of the general population, or (as I suspect) are they in the High Net Worth category occupied by a small percentage of Irish people?
Lou Reed, StrawmanDoes anyone really need a billion dollar rocket
does anyone need a $60,000 car
They are a good example of the benefits on not putting all the eggs in one (property) basket!!
If a 30 year old today were to take on the advice of paying off mortgage before saving...
Brendan recommends that before worrying about a pension you should get your mortgage 'down'.
If a 30 year old today were to take on the advice of paying off mortgage before saving...with a typical 30 year + mortgage he/she would never start a pension until the last few years before retirement
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