r/irishpersonalfinance Sep 21 '21

What age are you, and how much is in your pension(s)? Retirement

With pensions in the news, I thought this would be an interesting discussion.

I am 30, and have 1 pension that currently contains €62,399.

I currently contribute 15% and my employer contributes 6%. Come January, I will up my contribution to 20%. I would have 2 pensions, but I merged them as my current one has much lower fees. My pension is 100% in Indexed Global Equity.

41 Upvotes

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16

u/promisenottostop Sep 21 '21

Could people suggest a provider? I’m eager to start and unsure about who to go with so would welcome suggestions

2

u/0mad Nov 04 '21

If you cannot get one through work, then a Davy PRSA is often recommended. Cheap(ish) and Vanguard ETFs.

I am with Invesco through work

1

u/marsellythedonkey Sep 21 '21

Zurich or Aviva seem to be the most popular at the minute

15

u/iworkatabigcompany Sep 21 '21

I’m 24, and have ~€3300. I currently contribute 5% and my employer contributes 5% too.

13

u/jord-tech Sep 21 '21

I'm 26, have 1 pension with €10,212 in it. Contributing 5% & employer contributing 8%. Currently doing no AVC's due to having other financial commitments coming up - but plan to in the future.

5

u/Crackabis Sep 21 '21

8% from employer? That’s pretty decent!

2

u/jord-tech Sep 21 '21 edited Sep 24 '21

Aye it's not bad - 3%/5% or 5%/8% are the options given on joining.

12

u/magpietribe Sep 21 '21

In my early 40's, I didn't properly start my pension until I was about 30.

150k ish All global equities Employer 16%, AVC 6% I'll be moving this up to 8% at the end of our fiscal year. For the last few years, when I get a raise I put an additional 1% AVC into my pension.

Bonus about 33-50% goes in, but not always.

3

u/highgiant1985 Sep 21 '21

ER 16% is very good, mind if I ask what industry are you in?

3

u/magpietribe Sep 21 '21

Software Engineer for Financial Services.

33

u/YokeMaan Sep 21 '21

22 with €850, only started it two months ago lol. I put in 10% my employer puts in 5%

8

u/assflange Sep 21 '21

Keep it up

10

u/0mad Sep 21 '21

22, great head-start!

2

u/Apprehensive_Wave414 Sep 27 '21

Excellent start. You are miles ahead of I'd say 90% of the working population for your age. Keep up the great work. I'm 36 with about €5 in my pension. Only started 6 months ago. Should have listened to everyone when I was your age lol 😅

24

u/shoot-the-chicken Sep 21 '21

Jesus you guys really know how to put pressure on a fella. About to turn 40 and have about 25k in Construction workers pension scheme after they forced us to join years ago. €52 per week paid between employer and myself. Went self employer in March so need to get that goin again in the new year. Thanks for extra bill FRIENDS. 😁

8

u/elessar8787 Sep 21 '21
  1. 18k. I contribute 15% and my employer 12%. Invested in 100% global equity passive fund.

2

u/Apprehensive_Wave414 Sep 27 '21

Wow thats some contribution from your employer and yourself. What industry are you in. Just curious?

-7

u/funderpantz Sep 21 '21

At 25 you should only be in high risk funds for the next 30 years. Its a waste of time being in a passive fund at your age

16

u/grisewood Sep 21 '21

Passive does not mean it is not high risk. Passive just means it follows some index and the fund is not actively managed

7

u/funderpantz Sep 21 '21

Yeah I misunderstood

-1

u/elessar8787 Sep 21 '21

I don't think you understand what passive equity funds are if you think they aren't high risk.

5

u/funderpantz Sep 21 '21

You're right, I misunderstood. I'm assuming you are in IL, in which case the fund you are referring to is the right one for you

2

u/0mad Sep 22 '21

Hey. I like your manners. Nice to see on reddit

9

u/InterestedObserver20 Sep 21 '21

I'm 35, have about 68k in my pension, which is nowhere near enough. My employer isn't the most generous with it so I need to start upping my contributions a lot.

8

u/0mad Sep 21 '21

Why do you say it is not enough? Genuinely curious? Is there a ballpark guide somewhere?

2

u/chumboy Sep 21 '21

Hah, there's hundreds of calculators out there.

The basic premise is: work out how much of a "salary" you'd like to pay yourself every year post retirement, and work backwards to see how much you'd have to save to get that.

Once you've this worked out, you might find you can retire earlier than you think, but the opposite it more often true.

4

u/fungie89 Sep 21 '21

Or get a new job.

9

u/InterestedObserver20 Sep 21 '21

I like my job.

9

u/fungie89 Sep 21 '21

Fair enough, that's more important.

5

u/InterestedObserver20 Sep 21 '21

It is and it's something I value quite a lot. I've had bad jobs and it's not worth the stress. And to be honest, I'm probably not going to get paid as much anywhere else for doing the same thing so the AVCs aren't too bad.

7

u/kidspudi Sep 21 '21

26, ~20k in a mixed asset growth fund. I contribute 4% and employer contributes 10%.

I actually work in pensions and a lot of you are making me look bad lol FYI the average age for starting a pension in Ireland is around 37, typically people would contribute 5% which is matched by their employer. So the vast majority of the people here are way ahead of average worker!

4

u/Pugzilla69 Sep 22 '21

Why are you in mixed assets at just 26? You should be 100% equities at that age.

2

u/kidspudi Sep 22 '21

You're probably right. I'm in the default fund at the moment and don't really actively manage my pension since I only started recently

2

u/0mad Sep 22 '21

Great to hear!

Do you have any other pension stats for Ireland? Like the average annual pension for a retired person? Average retirement age (for people not dependent on state pension)? Average pot size at retirement age? It is a fascinating world.

7

u/Pugzilla69 Sep 21 '21

People should be in 100% equities until approaching retirement. Crazy to see people in their 20-40s with bonds in their portfolios.

31

u/Outside_Tradition972 Sep 21 '21

46 and nothing

4

u/[deleted] Sep 21 '21

You're not alone. I'm just completing my PhD and there's no such thing as a pension fund.. my savings are just a cushion for any potential accidents to the family. Now please don't tell me you're only joking there and make me feel worse.

3

u/[deleted] Sep 21 '21

And I'm 30 by the way, for anyone looking to hold hands together in solidarity of broke studentship

4

u/Outside_Tradition972 Sep 22 '21

Not joking at all bro youre still young and will have more time than me to get it sorted

3

u/johnwalshfc Sep 22 '21

Same as that

6

u/Boglehead1603 Sep 21 '21

27 - €30k - I contribute 10% company gives 15%.

Will likely add a portion of my bonus this year to reach the maximum 15%.

100% global equities.

2

u/0mad Nov 04 '21

15% from your employer? What industry, finance?

8

u/thereisnodoglevel Sep 21 '21

32 and around €130k.

Max out my pension contributions and recently did an AVC to cater for bonus payments.

Most people don't realise that any payments on top of your gross salary (i.e. bonus payments, BIK, etc..) are part of your taxable income and count towards your annual threshold. Your company will not normally deduct your pension % from these payments. So for those looking to completely max out, check out the taxable income on your December payslip and see if your max contributions (e.g. 20%) was taken. Get in touch with your company pension provider and they will also let you know what more you can contribute.

1

u/0mad Sep 21 '21

Awesome! I was unaware of this. Great to know, thanks

1

u/Ok_Piccolo_2752 Feb 02 '22

Do you have to submit a form to revenue for this?

1

u/thereisnodoglevel Feb 02 '22

If your employer provides a pension and have a pension advisor point of contact, they can let you know what the maximum amount of relief you can claim is and calculate the difference between what you contributed already vs your max allowable.

You can also do it alone, calculate it yourself and then include it in your tax return at the end of a year...but you need to make sure you do your calculations correctly.

8

u/[deleted] Sep 21 '21

26 and €0. I'm starting mine in January.

Who are all these mid 20 year old with these good salaries and tens of thousands in their pensions lol. Just more of them who browse this subreddit I suppose.

3

u/[deleted] Sep 21 '21

you're probably right, maybe this is an idiot filter, only the pennywise get through.

1

u/Economy-Mark726 Feb 11 '22

Hi there. Came across this while scrolling. Wondering if you got your pension started?

1

u/[deleted] Apr 18 '22

Nope. I left that job and started another one with no benefits whatsoever. So now I am going back to education for a career change. i'll get it started eventually....

6

u/travelintheblood Sep 21 '21
  1. Have a €6k (inflation linked) per annum defined benefit pension from old job. Have €62k in current defined contribution scheme where I’m putting in c€30k per annum between mine and employers contributions

7

u/0mad Sep 21 '21

€30k is a nice annual addition. Great job!

2

u/travelintheblood Sep 22 '21

Cheers man. It is, I’m a bit behind where I want to be as didn’t contribute as much as I could/should in the past. Hoping current levels of contributions will make up for it over time

6

u/DonegalEngineer Sep 21 '21

25 €11,400. I pay 8% employer 12%. Have been contributing for about a year and a half I'd say

5

u/Better_Arm1787 Sep 21 '21

Currently have an AVC with 780 in it as I started a few months ago and making minimum due to being bottom rung in the job and needing to have my needs met atm

3

u/0mad Sep 21 '21

Gotta start somewhere! Best of luck

2

u/Better_Arm1787 Sep 21 '21

Thank you. I'm on an incremental scale so I know I'll have it increased long before I reach that scale's max

5

u/[deleted] Sep 21 '21

[deleted]

5

u/0mad Sep 21 '21

It is all about priorities! Good luck with your mortgage

15

u/had0ukens Sep 21 '21

32 years old. €0.00.

15

u/0mad Sep 21 '21

€0.00......... so far

4

u/Vaughany99 Sep 21 '21

Does anyone work for the public sector and contribute to a SPSPS pension. Do you have additional pensions with zurich or Irish life?

5

u/54nk Sep 21 '21

Yes, PRSA AVC with Davy

3

u/Bipitybopityboo27 Sep 21 '21

Yes. With Irish Life. If you joined the public service after 2012 you kinda need to set up a private pension. Pension currently worth 11k. Just recently upped the contributions considerably. Not too far off my 20% limit now. Hoping to be putting circa 7k a year into it. invested in funds with risk ratings of 5 to 7. Irish Life allow you to spread the pot over a max of 5 different funds.

3

u/Vaughany99 Sep 21 '21

Do you get employer contributions on the Zurich one?

2

u/serendipitous20 Sep 21 '21

Yeah separate pension from last job with Zurich. Can’t be relying on that public sector pension, need to work about 100 years in the public sector to reap the benefits of that scheme!

5

u/funderpantz Sep 21 '21

136k but that was at 4% avc & 8% employer

I'm about to pick up the keys to a new house so will ramp my AVC up to the max 25% (age 45) next month as I had to look attractive on paper to mortgage lender.

So I'll go from 12% total going in to 33% total going in, should start to see it climb rapidly.

4

u/Ilovepiealways1 Sep 21 '21

35 yo, 200k, maxing contributions @20%, incl. 12% employer contribution. Started @28 yo

5

u/Super_cereal3 Sep 21 '21

I’m 29 and have about €17k in my pension, I was a little late starting mine due to changing jobs frequently. I put in my max of 6% and my employer pays 7%. I am starting to put about 50% of bonus into my pension every year.

I’ve covered most major life expenses so I can now focus on putting extra cash into pension.

4

u/the_one_jt Sep 21 '21

37, €102,426.30

Employer PRSA plan. I contribute 6%, employer 7%. I then put 14% AVC. Combined this is 27%. I might be contributing above the amount for tax relief as something I read says my employer contribution counts against my 20% for my age if it's a PRSA. Once I fully understand this I might reduce this amount, and move more into taxable accounts.

IrishLife 18.4% - Indexed Emerging Market Equity Fund 81.6% - Indexed World Equity Fund-Partially Hedged

Really have limited options here on what to invest in.

1

u/TarAldarion Sep 21 '21

Yes you are above the limit, you'll get hit with a tax bill I guess, not sure how they do it.

1

u/fungie89 Sep 24 '21

Just gets taken off the next year's, not a big deal.

1

u/fruitydanimals Feb 25 '22

How does that work? I contribute over my tax deductible 15% (20 for me + 8 for employer) but my return was a lot this year and I haven't noticed big tax bills over the 2 years I've worked here...curious! Thanks for any insight you provide.

1

u/TarAldarion Feb 25 '22 edited Feb 25 '22

Honestly I'm not sure, if there has been extra tax relief on that and find out about it you could be hit with fines on top of the tax, but you'll probably have to contact them to know what's up. The reason you've not noticed anything is they haven't noticed yet.

Edit: I read on a providers site now that "penalties are applied" when you break the limits but it doesn't say what.

5

u/techno848 Sep 21 '21

25, started 2 months ago so 2k~. I put in 8% and my employer puts the same. I feel alot of stress whenever i think about the pension i will probably receive when i do retire. Doesnt sound too much to me. Idk if i am overthinking or have a different perspective on it. Are there any people who have retired and receiving pension could shed some light how they manage the current expenses ?

4

u/0mad Sep 21 '21

I think the idea is when you retire that your "current expenses" are minimal - well, that's the hope. I think starting at 25, you are setting your self up nicely. Probably not best to be overthinking it, as it is 40 years away yet. You are still way ahead of the game. Keep it up

2

u/deeringc Sep 22 '21

Keep in mind that your salary will likely grow quite a bit over your career. So, projections based on what you earn now (and therefore what you're able to put away now) are a lower bound. In another ten years from now you'll probably be putting in a higher % of a bigger salary, and then again ten years after etc...

5

u/Plenty_Vegetable7263 Sep 21 '21

I'm 35. Started contributing to pension at about 30. Fund is currently at 37K (50% World Equity Fund, and 50% in a more conservative mixed fund).

A few years back I was contributing about 10%, but now reduced to only 5% as I'm trying to save for a house deposit, and also I get the max employer match of 5%.

If/when we're able to purchase the house, I'll probably contribute 10% again + 5% from employer.

I'm impressed by the pension pots some of you managed to build over the years, and some of the employer contributions are really generous. In my experience, 3-5% max contribution from employer has been the norm.

Pensions are a great tool to invest long-term as we get employer contribution + money is invested pre-tax. This is a no-brainer. But I also like to diversify and not put it all into one pot.

4

u/0mad Sep 21 '21

Yes, sign me up for one of these 12%-15% matches.

What other pots have you got?

3

u/Plenty_Vegetable7263 Sep 24 '21

I've another pension fund in another country where I previously worked. I don't contribute to it anymore, but it keeps growing each year and does its thing.

I've also invested over the years in individual stocks that I select based on their value/potential. I like the fact that I can decide which companies to buy and own.

Also, ideally I'd like to retire before I'm 65. So I like having more control over where I put my funds and how easily accessible they are. As I said, pension plan is a no brainer as money is invested pre-tax and we receive free money from the employer matching our contributions. But it also has drawbacks in my opinion (little control over the funds once invested, stuck until we're 65, and trust the fund managers won't mess around).

I also received equity in the company I work for which works well as a savings/retirement plan. Bought my apartment, so own "some" property (the bank owns it too 😂). That's about it :-)

2

u/fungie89 Sep 24 '21

You are aware your pension isn't in 'one pot', right?

1

u/Plenty_Vegetable7263 Sep 24 '21

Yes and no. It all depends in what asset your pension is invested it. Some of us here said they've chosen a 100% All World Equity Fund. While this is globally diversified, it is still in one asset class (stocks and equity). Some famous analysts (like Michael Burry) have argued that these passive ETFs could get/be into bubble territory.

Also, the pension plans will kick in at least after we're 65 if I'm not mistaken. If possible I'd like to retire before that, and I don't know if it will be in Ireland or in another country.

And, I wonder if the pensions schemes are 100% insured, if for example the providers would go bust. For example, funds in a bank account in the EU are insured up to 100,000€. But I couldn't find any info about pension funds being insured in case of bust.

So to give me more flexibility and peace of mind, I like to diversify and consider various sources of income for my retirement instead of relying on one source only.

2

u/fungie89 Sep 24 '21

Most private pensions allow you to retire at 50 FYI.

9

u/highgiant1985 Sep 21 '21

I'm 36 and paying 20% of my salary in at the moment with my employer paying in 7%. My pension fund is 159k currently.

I'm curious about how much other people have as well as when you look at the pension calculators it always feel like the fund is never enough.

6

u/0mad Sep 21 '21

Pension calculators are impossible! It is very hard to know if we are on track or not. I am going to keep up my AVCs and see where I end up anyways.

Is there an Irish "need X in pension by age Y" guide I wonder?

2

u/fungie89 Sep 24 '21

They are also very pessimistic as it's in their interest (and yours, let's face it) to put more money in.

I just use a compound interest calculator.

1

u/phate101 Sep 21 '21

On my providers site, Aon, they have a nice calculator that projects your pension amount based on current contributions and factoring in inflation and some other stuff that I don’t get.

3

u/VeteRyan Sep 21 '21

26 and 2k.

I was late looking into it, only just started like 2 months ago.

I contribute 5% and my employer contributes 11%.

7

u/[deleted] Sep 21 '21 edited Dec 09 '21

[deleted]

2

u/phate101 Sep 21 '21

You’re earlier than most actually…

3

u/nimrod86 Sep 25 '21

I'm 25, and have €24,277 as of today. Started at 21 on company scheme (I contribute 4%, and company contributes 8%).

Might look to up my contributions or start doing AVC's in the next few years to set myself up well as company policy will let me retire at 49 which happens to be the same year I'll have the mortgage is cleared.

6

u/grisewood Sep 21 '21 edited Sep 21 '21

30s, 90k after almost 6 years of contributions. Wish I'd started contributing and maximising contributions earlier.

Could be wrong but if you turned 30 this year, you would be able to get tax relief up to 20% for this year

2

u/0mad Sep 21 '21

Yup, I am aware that I can contribute 20% now. Just waiting.

Not bad after 6 years. I was in Australia for 2 years, so took a pension hit. Getting back on track now though

1

u/0mad Nov 04 '21

I am now contributing 20% thanks to your comment. Why wait?

2

u/nithuigimaonrud Sep 21 '21

This is good to know will be upping my contributions accordingly.

2

u/rebellious-rebel Sep 21 '21
  1. About €177k in a mostly global equity fund. Contributing the full amount up to allowable limits.

Also have a €3k DB annual pension from an old pension scheme at work. That would cost c.€70k as an annuity.

2

u/0mad Sep 21 '21

That would cost c.€70k as an annuity

Hi, what does this sentence mean? Does it mean that your €3k pension will be worth ~€70k when you retire? Thanks

2

u/rebellious-rebel Sep 21 '21

No it means that €70k would "buy" you an annual pension of about €3k.

1

u/0mad Sep 21 '21

Ah, gotcha

2

u/Fuji_Fan Sep 21 '21

41, 6k p/a defined benefit pension from previous employer. Also have 13k in a PRB from another pevious employment invested in Zurichs Top Tech 100 fund. Started new job last year. Employer pays 10%, I pay 5%. Started putting €125p/w AVCs 3 months ago.Current value. 15k.

2

u/sijohnso321 Sep 21 '21 edited Sep 22 '21

I’m 37 ~ 186K. I’m contributing 4%, employer contributes 9 % and my AVC contribution is 16%. I have been gradually increasing my AVC percentage over the years to reach the max amount. Pension consists of mostly equities and partially hedged/bonds.

2

u/dansRedditAc Sep 21 '21

30 years with €5,500 in total recently set up. 5% from me along with 5% from employer.

2

u/Kier_C Sep 21 '21

Mid 30s, contribute 5%, employer does 15%. A little over 1 years salary in a global equity fund at the moment

2

u/nithuigimaonrud Sep 21 '21

29 - Have £71k in a uk pension in global equities,+ emerging markets - uk employer was giving 15%-20% allowance as pension contributions or to be taken as salary.

Just moved to Ireland and Contributing 15% with employer add on of 4%. Will contribute 20% when I’m over 30.

2

u/dominyza Sep 21 '21

I'm 42 and am the money I have saved is in a South African pension, which is worth fuck all.

At this point, my retirement strategy is to wait for my husband to kick the bucket and claim the life insurance. I'm so fucked. :/

3

u/macmillsy Sep 21 '21

I always thought that your employers contributions counted toward your overall tax free allowance?

So if you’re 30 and get tax relief of 20%, then that would be say 10% your contribution and 10% the employers… but if I did 20% and the employer did 10% then I would lose tax relief on the employers 10%…. No?

16

u/PinkFart Sep 21 '21

Nope. Tax free allowance is only on your portion.

8

u/1483788275838 Sep 21 '21

It depends. If your pension is a PRSA then it does include employer contributions.

If yours is an occupational pension, then it's just your contributions so you can go up to 20%.

1

u/GuybrushThreewood Sep 21 '21

Your contributions attract tax relief i.e. your earnings for PAYE purposes are reduced by the contributions before your paye cutoff and credits are applied. So you could get 20% or 40% relief depending on your earnings. There are limits on tax relief available (age based and an overall limit).

Interestingly (okay it's not so interesting) for a PRSA employer contributions do attract tax relief for the employee, but this is cancelled out as they are also considered a taxable benefit in kind.

1

u/Pablo_Eskobar Sep 21 '21

Isn't it only deferred tax and you do pay it on draw down?

3

u/deeringc Sep 21 '21

Well, you might be earning at the higher rate of tax now and would therefore pay 40% income tax on that income. By putting it into the pension it first of all gets to grow for 40-50 years with compound growth/interest which is huge. But also, when you actually take your pension, the tax bands apply again, so you will pay no tax on the first chunk, 20% on the next chunk and only 40% above the higher rate of tax threshold (obviously those specific numbers might change by the time you retire, but the principle remains the same). The truth is that most private sector pensions are quite small in terms of what they pay out every year, so most people dont pay much or any of their pensions at the higher rate.

2

u/GuybrushThreewood Sep 21 '21

That depends on how you draw it down, tax free lump sum vs annuity etc. Yes annuities are taxable, but you could be getting relief at 40% and be paying tax at a less than 20% effective rate on drawdown.

2

u/Pablo_Eskobar Sep 21 '21

I need to really learn bout this stuff. 44 haven't started one yet but the mortgage will be clear in 8 yrs figure I'll lump that into one once its clear. Never gonna put a 100s of thousands into one at this stage but should have a nice lump sum if I make it to 66

7

u/funderpantz Sep 21 '21

The biggest benefit of a pension is on the compounded interest over time i.e the sooner you start the bigger the benefit to you

Waiting another 8 years puts you at 52, retiring at 66, gives you 14 years of a pension. Honestly thats going to be a tiny, tiny pension.

You would be far better off starting asap and putting in as close to 20% of your salary as humanly possible at your age, regardless of what the actual % ends up being. Basically start asap otherwise you'll be living off the govt pension which is f all

1

u/kdamo Sep 21 '21

26 - 12k, contributing 6% employer matching that. Have it split into 4 different higher risk funds as of very recent, not sure if it’s a smart strategy but will ride it out for a while to see

1

u/0mad Sep 21 '21

What are the 4 funds? Sometimes too much diversity if not as diversified

1

u/kdamo Sep 21 '21

High Growth Fund, Index World Equity Fund, Indexed Ethical Equity and Moderate Growth Fund

2

u/0mad Nov 04 '21

Index World Equity Fund

At 26, this one is all you need, and where I would allocate 100% of my pension (I have done this)

2

u/kdamo Nov 09 '21

I’ve followed your advise, people in my company seem to have the same opinion. Let’s hope it pays off ;)

2

u/0mad Nov 09 '21

See you at 65 years old mate 👍

1

u/paddyirishman95 Sep 21 '21
  1. 13k I do 7.5 employer does 15% being made redundant in the new year and they are adding five k as part of redundancy

1

u/CGSGaming Sep 21 '21

Who is good to have a private pension with?

1

u/0mad Nov 04 '21

I believe a Davy PRSA is supposed to be good. YMMV

1

u/Vocalsoul Sep 21 '21

30 and I have no idea, not much though probably.

1

u/kquey95 Sep 21 '21
  1. Employer contribution of 12%, I give 6%. Fund is worth about 20-21k atm. Will prob look to increase my contributions to 10% in the new year. All in equity funds.

1

u/paulovittor23 Sep 21 '21

I'm 34 with 30k on the pension. Currently I add 6% and my employer 8% a month. As I just immigrated to Ireland 5 years ago and started my pension in Jan/2019 I'm happy enough so far. BTW, it might be a dumb question but what happens if you need that money? I know it's not supposed to be utilised but sometimes life can decide things for you so it's good to know. Is there a rule for it or does it change based on the pension you have? Thank you.

1

u/mattelekenesis Sep 21 '21

23 and nothing. Went back to college late, so I'm broke until I get my first big girl job. On this sub to plan ahead!

1

u/farmhousesink Sep 22 '21

36 years old, not Irish but living here 8 years and contributing for less than that. I contribute 5% to get employer match of 5%. I have about 36k. Still not sure If this is where I stay for retirement, it is tricky.

1

u/Affectionate-Ad8645 Sep 22 '21

26 , 20K ! Lost all my employer contributions from my last job cause I left before 2 years (was about a week off didn’t realise they took before the 2 years🙄) contributing 5% and employer pays 10%! I use my bonus for AVCs every year

1

u/teafather20 Sep 22 '21

If you have not transferred your pension from old into new you can withdraw it and put it into new as AVC and claim tax relief on it.

1

u/Affectionate-Ad8645 Sep 22 '21

It was the same pension company so it just kept my own contributions and took out the previous company contributions ! But that’s great to know for future reference!

1

u/Forzeev Sep 22 '21 edited Sep 22 '21

Been working 3 years in Ireland, Irish Pension fund I have around 14k(I have just put minium to benefit max from employer contribution). in Nethelands 7k. From Finland I have state pension where I was working in my teens/early 20s.

I am 33, I really don't know how my Pension will form. There is 90% change that I move next to Switzerland, they are flying me over for Final interview this week.

I try to have back up plans as well and investing in Funds/Stock and Crypto as well bit.

1

u/sullybags90 Sep 22 '21

In my previous employment I didn't want to contribute at all...so only put in 3%, and my employer also contributed 3%. I have about 10-12k sitting in that. Currently (employed 2 years) sitting on 15k. 5% by me, 10% by my employer and I play with my AVCs monthly depending what's going on. I wish I put more money into my pension in my previous job instead of drinking it 🙈

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u/Either-Welder-1034 Sep 22 '21

Is it normal for employers to contribute to your pension? Is that part of your salary? I'm moving into my second job since finishing college and neither employers have a pension scheme that I can avail of. Environmental industry.

I started a personal pension last year through bank of Ireland in which I put 200 a month and that's it. Don't know much about it because I've never asked about it. I see Zurich and Aviva are the popular choices here... I guess I'm getting screwed by BOI too.. can you move pensions if you so choose?

Also now we're on the topic I know that pensions are not taxed. But 200 is taken out of my account every month regardless, how would I go about getting the money that shouldn't be taxed back?

Thanks.

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u/0mad Sep 22 '21

I am not sure if it is "normal", it is probably considered a benefit. Companies don't have to. Might be worth having/starting the conversation with your employer.

I think fees matter a lot with a pension. Compare your BOI fees with others suggested and see if it is worth while. Consider just how much 1%/year extra could cost you over 30+ years.

If your employer does not deduct the contributions, use myAccount to complete and file an income tax return.

Source. I believe there is a section on your balancing statement for the previous year(s)

1

u/FreeAndFairErections Sep 22 '21

Depends mainly on the sector you’re in I’d say. Some sectors it’s the norm and others it isn’t. Definitely a good benefit to have and can incentivise some additional saving if it’s matched.

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u/Either-Welder-1034 Sep 22 '21

Yeah. I remember my first job after college the first meeting I asked about the company pension scheme and was told it didn't apply to me. Jealous of people who's employers contribute to their pension. I make some wild plays on stocks and crypto trying to generate some personal wealth but would definitely feel more incentive to max out my pension contributions if I was getting employer contributions like some people here are and make those sweet tax free gains. Damn I'm in the wrong industry I guess.

1

u/Bland_Skittles_ Sep 22 '21

I’m 27 and have €0. I’m afraid to start mainly because I’m poor and also because it seems if I was jus to save by myself there’s no chance of it being taken off of me. Also I’m pretty sure my employer should be paying 5% of a pension for me but is that only if I am paying into a pension ?

1

u/0mad Sep 22 '21

Your employer will most likely require you to contribute a certain amount in order to receive their 5% match. You may have to contribute 5%. This is most definitely worth doing as it is extra "free money" for you (even if you cannot access until you retire).

As for it being taken off you, I think this is highly unlikely. The tax allowances could change by time you retire (can take up to €200k tax free currently), but I very much doubt it will be taken off you.

Is there a reason you think this? Currently, in the news, they are discussing the state pension - not a PRSA or DC Pension like the type employees pay into. The state pension is ~€12,000/year

1

u/Bland_Skittles_ Sep 22 '21

Perhaps that’s what I am thinking of is the state one. It’s something I would like to do and have planned so I should definitely look into it.

1

u/Jellybanes Sep 22 '21

28 and have 30k. I contribute 6%,employer contributes 12%. Then avcs I contribute about 10%.

1

u/NosIreland Sep 24 '21

41 with 140k, contributing 25% + employer adds 5%
I should have started and maxed out earlier but it was not clear to me at the start when I moved to Ireland and also plenty bad advice. The hope is to move back home in 10 years and hopefully my pension will provide enough.

1

u/vivbear Sep 25 '21

Can someone explain to me how AVC work or where I can work out how much AVC I should pay into my pension Thanks in advance

2

u/0mad Nov 04 '21

In a DC pension with an employer match, it works like this.

Say you are 31. Your employee contributes 5% if you contribute 5%. In a DC pension, employer contributions are excluded from the tax free limit, which at 31 is 20%

Anything you contribute after that 5% is considered an Additional Voluntary Contribution (AVC). Your contribution (5% in this case) + AVC is eligible for tax relief up to 20% here.

So going into your pension every month is:

5% (employee) + 5% (employer) + AVC%

Roughly.

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u/[deleted] Oct 27 '21 edited Oct 27 '21

[deleted]

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u/0mad Nov 03 '21

If you are 24, 20% is too high. You will only get tax relief on your 15% contribution. Not sure if you are aware of this or not.

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

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u/[deleted] Nov 03 '21 edited Nov 03 '21

[deleted]

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u/0mad Nov 04 '21

Nope, doesn't hurt. You just don't get tax relief on the extra 5%, and it is locked up with the rest of your pension - but you still get untaxed compounding growth (no deemed disposal in a Pension).

And, the more you get in early, the larger the growth potential (check this out with an online compound calculator).

An alternative (with that 5%) might be just to invest it yourself in an ETF (a well diversified one). This way, if you ever needed it you could sell up and use the cash for house, car, emergency, etc.

Also, might be worth talking to a financial advisor about this too.

1

u/privlko Feb 02 '22

Hey, I have a question about this. I'm trying to invest a portion of my money into a specific Indexed Global Equity Fund, but the sales rep is constantly redirecting me towards a PRSA. Am I right in thinking that this is a different thing? When I ask about setting me up with a specific fund that I want to join he replies 'it's not available on this plan [PRSA]'.

I could be totally wrong, I have no idea about pensions. Am I missing something?

3

u/0mad Feb 02 '22

PRSA = Personal Retirement Savings Account. It is an account where you "save" (invest) for retirement.

There are many different PRSA providers such as Irish Life, Zurich. Each provider (typically) limits the funds available to for investment in their PRSA. Irish Life want you to invest in Irish Life funds (MAPS). Zurich in theirs (PRISMA).

Typically these are expensive, actively managed (a con), and have poor performance. Typically. I believe my pension (Invesco) have an Indexed Global Equity Fund Irish Life fund available - which I invest in.

sales rep is constantly redirecting me towards a PRSA

Sales reps work on commission, and active funds are expensive for this reason, $$$. I believe (don't quote me) it is in their best interest to shill an Active fund. If the sales rep cannot provide what you are looking for, move on. No need to settle here.

As well as fund choice (Indexed Global Equity Fund is exactly what you should be seeking) you should be looking at fees. There is an AMC (average? management fee), lower = better. But there is also contribution fees/rates. You will often see 95% contribution. This is bonkers! Every €100 you contribute, they take €5. This can and should be avoided at all costs.

This is not financial advice, but here are other areas to explore:

  • Tell your sales rep exactly what you are looking for, and drop him if he cannot provide it. He is selling a product you do not want.
  • Research Davy's PRSA. It is often mentioned on this sub due to it's low fee (i think 0.75%), it's fund choice (you can invest in Vanguard funds), and it's 100% contribution.
  • LA Brokers often pop up here too. Read their PRSA page (nice explainer on the 5% charge), 100% contribution, Zurich
  • Shop around. Everyone wants your business, so be sure you get what you want.

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u/[deleted] Sep 21 '21

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u/rebellious-rebel Sep 21 '21

Most occupational pension schemes allow you to retire early from age 50. Far from "old". In any case pensions are the only tax free investment option on Ireland. Why wouldn't you take advantage of that?

If you don't save for a pension you'll be living on the pittance of an OAP in your retirement. That's a fairly grim prospect.

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u/[deleted] Sep 21 '21

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u/rebellious-rebel Sep 21 '21

But that isn't tax efficient. You have to invest using your net income (after tax) and it's subject to CGT coming out.

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u/[deleted] Sep 21 '21

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u/rebellious-rebel Sep 21 '21

Right......

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u/[deleted] Sep 21 '21

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6

u/rebellious-rebel Sep 21 '21

How is that relevant to Irish people living on Ireland?

0

u/[deleted] Sep 21 '21

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u/0mad Sep 21 '21

Are you anti pension? Or just like property?