r/irishpersonalfinance 7d ago

Retirement How much is enough?

14 Upvotes

What annual income do you consider enough to retire in Ireland?

r/irishpersonalfinance 7d ago

Retirement Leaving job with pension before 2 years

18 Upvotes

So I left my job before the 2yr mark which means the contributions from the company will not vest. I’ve been reading that I have 3 options:

  1. Keep my contributions into that account
  2. Consolidate the account into another one (I have one from my prev prev job)
  3. Take out the money and pay 20% tax on them

Number 3 does not sound right, if I pay 20% tax on the sum I would essentially get a 20% tax discount as my pension contributions came out of my 40% taxable income. Does this sound right?

EDIT: info from https://www.pensionsauthority.ie/en/lifecycle/benefits_payable_on_leaving/refund_of_member_contributions/

If you are a member of a pension scheme, you may be obliged, if you have less than two years' qualifying service (broadly service as a member of the scheme) when you leave service to take a refund of the value of your own contributions less tax at the basic rate.

Some schemes may permit you to leave your contributions in the scheme, even though they are not required to do so by law. AVCs are treated in the same way as main scheme benefits.

Even if you are not obliged to take a refund of contributions and you have less than two years' qualifying service, you may still choose to do so.

PRSA providers can pay a refund if you haven't contributed for two years and have a PRSA worth less than €650 and were given three months' written notice to terminate the PRSA.

r/irishpersonalfinance 3d ago

Retirement Pension tips

9 Upvotes

Any tips on who the best pension provider in Ireland is? Fees, roi, etc?

Where should I be starting?

r/irishpersonalfinance 22d ago

Retirement How much should I be saving for possible care home needs in future?

31 Upvotes

Hello,

Some stats:

35 years old

Salary 63k

I have a pension, 90k in there at the moment and 1470 going in each month (20% from me and 8% from employer).

No savings, but that's because I have just paid off the mortgage (250k house)

I am well on my way to a decent retirement, however the one question I have is about care when I am older. My gf and I won't be having kids, so if anything were to happen that meant we couldn't live unassisted we would have to look to professional help. There are lots of calculators that suggest how much you need to save based on lifestyle you wish to have or how early you wish to retire, but I don't see much in the way of nursing home costs, which from what I can tell googling are prohibitive.

How much at retirement age should I look to have in place to cover those? Hopefully I'll be fit and healthy enough to die in a skydiving accident on my 100th birthday or something, but want to have some game plan in place just in case that doesn't happen.

r/irishpersonalfinance Nov 08 '22

Retirement Is this a good deal?

29 Upvotes

My employer has made me an offer on a pension plan...

  • Will contribute 10% of whatever I decide to pay e.g. if I contribute €1,000 they will contribute €100
  • No Policy Fee.
  • No Exit Fee.
  • There is a total Annual Management Charge (AMC) of 1.5% for standard funds (1% to the Insurance Company & 0.5% to xxxxx Financial Services)

Based on what I've read on this group, that appears to be the worst offer I've come across so far!

r/irishpersonalfinance Nov 08 '22

Retirement Is it too late to start a pension?

42 Upvotes

Hi all, I know the answer to the click-bait title is "no", but I'm nearly 40 and have zero pension. This is mainly due to some very bad decisions during my 20s and I've spent most of my 30s to finally get myself financially secure again. I now have a mortgage and kids to support.
I just recently started a new role where they will match up to 5% - at the moment I reckon the most I could afford to contribute to my pension would be about €200/month.
So my question is, is this even worth it? Thanks.

r/irishpersonalfinance 23d ago

Retirement Any reason for NOT transferring pension to new scheme after changing employer?

21 Upvotes

I recently changed job and both my former and new employer are offering DC pension schemes.

I was planning to request a balance transfer from the old scheme to the new one for 2 reasons: - simplicity (have only one pension provider to deal with going-forward) - I believe the new pension provider (Zurich) has better funds than the old one (Aon) - and in any case they definitely have a broader selection

Now, a colleague told me I should look into this as there might be downsides with closing the old scheme in terms of forfeiting some benefits or the possibility to optimise taxation by cashing-out multiple pension schemes in stages as opposed to all at once. But he wasn’t sure about the details.

I did a bit of research on this but TBH I don’t feel I am any wiser.

Any advice on what the best approach is and whether there are specific things I should look for before going ahead with a transfer?

Thanks a lot, much appreciated.

r/irishpersonalfinance 18d ago

Retirement Is it unusual to ask your employer to contribute to your own PRSA?

11 Upvotes

My employer is providing access to a PRSA offered by a local finance broker. They are contributing a minimal amount (10% of my contribution - NOT 10% of my salary!). However the annual charge on the pension is 1.75%. I've worked out that given the below average contributions provided by my employer and the above average charges, after 5 to 6 years the annual charges will totally consume my employer's annual contribution.

Is it feasible to just set up my own PRSA (e.g. Davy self directed with 0.75% charges) and ask my employer to contribute to this instead? Will the monthly deductions be a big deal for them to set up?

r/irishpersonalfinance 6d ago Facepalm

Retirement how much pension control do I have?

2 Upvotes

Could I ask Aviva to invest whatever is in my pot to a specific company I think is undervalued and will do well in the medium to long term. I know there is an option to keep the kitty in cash. Or do I have to go with whatever risk strategy they think is appropriate?

r/irishpersonalfinance Oct 17 '22 Wholesome

Retirement About two years ago I changed my Irish Life pension funds, here's what happened.

84 Upvotes

TL;DR: This year has been a disaster but absolutely still worth changing.

Background

I've had a defined contribution pension with Irish Life for about 7 or 8 years now though my company. When I signed up I was defaulted to the Empower Growth Fund. This is a Medium Risk fund - slow and steady growth, with about a 4% return. With today's inflation rate of 8% you can see how that's not a positive outlook.

Pension Fund Choices

In 2020 following some advice from a Redditor on Irish Life's definition of fund risks, I sat down and reviewed some other funds that I was interested in. I picked three for the purpose of a little diversification, but how many you pick is entirely up to you. There are dozens available through Irish Life, but the ones that are available to you might be far more limited, I think based on what your own company signs up for. The 2022 Master Trust changeover seems to have limited options.

I tried to pick non Active funds where possible as I didn't want to pay fees associated with managed funds.

North American Equity Fund - The North American Stock Market. Huge focus on IT, Healthcare, and Business across stocks. The risk there is obvious - tech.

Indexed Global Equity Fund - Similar to the above, but about half the fund is outside the US. I would prefer if more of it were less dependent on the US Market.Alternative: Indexed World Equity Fund

Setanta Passive Equity Fund - Passive investment in large companies world wide. I'm not a huge fan of this option because there seems to be pretty limited information on this online. But I wanted something that wasn't just focused on tech.

Pension Fund Performance

All of the pension funds have PDF Factsheets available online that show the last five years worth of performance. Because I did this review in 2020 and again in 2022, I have eight years of performance charted.

Year Empower Growth Fund North American Equity Fund Setanta Passive Equity Fund Fund Indexed Global Equity Fund Series 2
2015 8.02% 9.85% 8.68% 10.52%
2016 7.28% 14.79% 9.45% 8.48%
2017 8.35% 6.03% 5.74% 8.82%
2018 -3.57% -1.25% -5.59% -6.18%
2019 13.44% 32.67% 27.57% 28.40%
2020 0.34% 9.10% 2.91% 4.58%
2021 15.06% 35.54% 30.15% 27.90%
2022 (YTD) -13.04% -12.94% -7.07% -15.28%
Average 4.49% 11.72% 8.98% 8.41%

Performance Impact

You might be thinking "Eh not much of a difference between 4.49% and 8.41%". You're not factoring in Compound Interest. Remember this interest is calculated on a yearly basis, not just at the end of a 25 year pension.

Sample Scenario

Let's assume that you:

  1. Have 25K in a pension already (Principal)
  2. Want to contribute 10% of a €60K salary (Contributions)

I'm using the lowest of the three new funds to make this easier to read, so 8.41%.

20 years

Fund Option Interest Rate% Years Principal Contributions Final Value
Empower Growth 4.49% 20 25,000 6,000 €248K
New Fund 8.41% 20 25,000 6,000 €413K

25 years

Fund Option Interest Rate% Years Principal Contributions Final Value
Empower Growth 4.49% 25 25,000 6,000 €341K
New Fund 8.41% 25 25,000 6,000 €654K

Slight difference there, don't you think?

Final Outcome

I split my pension into three for each of the new funds. I didn't leave any in Empower Growth. So my pension has gone through a 30% high in 2021 followed by a -15% crash in 2022.

Admittedly more of a rollercoaster than I expected - having a war, energy crisis, and recession starting in one year was not expected.

Q&A

Given the 2022 crash, was this even worth doing?

If I had left it in Empower Growth, it would have done 0% in 2020, +15% in 2021, and -13% in 2022 - so just 2% growth in three years. Even with the crash I am literally thousands of euros better off than I was than staying. Will that be the case in 2-3 years time, difficult to say.

Aren't these newer funds higher risk?

Absolutely, which is why Irish Life state that if you are near retirement, you should absolutely not move to, or be on these funds. Again: if you're on these funds aged 64 you're a dumbass. Imagine retiring in 2008 or March 2020 - you would have lost 20-50% of your pension.

However in both of the above cases, within several years the funds bounced back to higher numbers than ever. So take a hit while younger, but keep the faith.

Your pension could get wiped out?

Even in the darkest days of the 2008 recession these pension funds did not get wiped out.

How did I calculate Compound Interest?

I used the FV function in Excel, though there are a variety of online calculators you can also use.

Your final calculations don't include management fees?

True, but that applies across the board so it's still an even comparison.

How do I actually change my funds?

https://www.pensionplanetinteractive.ie/

I can't see these exact funds online?

The Master Trust changes in 2022 may have limited certain options available. My options in 2022 are wildly different to what was there in 2020.

Would you pick the same funds today?

I can't - my online options have changed and have been limited quite a bit since 2020.

Alternative Funds?

Due to Master Trust changes, I think Indexed World Equity Fund seems the best option for now.

r/irishpersonalfinance 2d ago

Retirement Employer Pension + Davy or DeGiro?

3 Upvotes

I am over 40 and can contribute up 25% into a pension.Once I have contributed the max that the employer would match, what should I do next?

  1. Contribute only into employer pension
  2. Contribute 10% in the employer pension and the rest into a PRSA like Davy select that will allow me to invest into low cost funds
  3. Contribute into pension, davy select + online broker such as DeGiro.

For the sake of simplicity, let's say I make 50k, no dependents, no mortgage yet.

r/irishpersonalfinance Oct 25 '22

Retirement Pension question

28 Upvotes

I am very naïve on this topic so just looking to get an opinion. I’m 35 and currently have 60k in my pension.

I contribute 10%, my employer contributes 12%.

Is this good, bad, normal, etc.?

My pension provider gives me a statement that I’m within the recommended range but I just don’t really know in everyday terms if that’s enough or too much.

Thanks for any opinions and sorry for the silly question!

r/irishpersonalfinance 10d ago

Retirement Transferring a UK pension to Ireland

1 Upvotes

I am Irish domicile and have been living in the UK since 2003. I have a private pension and considering my options if i move back to Ireland in the next few years and plans to retire in 2035. I have a few queries regarding private pensions, does anyone know if you have to pay tax to transfer the pension to Ireland before you withdraw funds.

r/irishpersonalfinance 6d ago

Retirement Leaving group pension scheme to go traveling for a year.

4 Upvotes

So I have left a job to go travelling for the year. The job I had did a group pension scheme with a matched contribution. Now that I have left that job I am no longer part of the group pension scheme. Because I'm going traveling for the year and won't be starting a new pensionable job I can't transfer the accrued fund into a new pension scheme. I'm a bit lost, can anyone tell me what my options are? PRB's look like the way to go but it seems like I won't be able to roll that into whatever job I get next.

r/irishpersonalfinance 25d ago

Retirement Pension Tax Relief for 2021

4 Upvotes

Hi guys

I have no pension contributions with my former employer for 2021. I am currently setup as a director for an umbrella company and paying monthly pension contributions into a PRSA. Despite not having made any contributions through my previous employment, can I make a lump sump payment eligible for tax relief for 2021 into the PRSA prior to the November 16 deadline? If so, what is deadline for claiming the tax relief on this through ROS?

r/irishpersonalfinance 4d ago

Retirement Self employed prsa contributions limit

2 Upvotes

I have researched this but my lack of knowledge means I need help/clarity.

I am hoping to become self employed and open a self employed prsa.

Is it correct that I am allowed to contribute an age related percentage of my total income for each year in a lump sum?

My income will be irregular ie not monthly and not a consistent amount.

How do I account for income earned after the mid November cut off date but still in the same year? Is my yearly prsa contribution limited to only my age related percentage of income earned before the cut off date? How do I incorporate my end of year earnings in my calculation?

Example: I may earn a big chunk of my yearly income at the end of the year (after mid November). How do I get the tax benefit of a pension contribution based on this income?

Note I have only just applied for self assessment and don’t have prsa account yet. I am just trying to figure out how it will work.

I suspect there is a embarrassingly simple answer here, please be gentle.

r/irishpersonalfinance Oct 27 '22

Retirement Pension contributions

8 Upvotes

Employer pension contributions- what seems to be the “going rate”(%)?

r/irishpersonalfinance Oct 31 '22

Retirement Independent financial advisor?

20 Upvotes

Could anybody recommend an independent financial advisor in the Limerick area?

Or failing that any online ones worth a look?

Also ballpark, what should I expect to pay, say for a single consultation on pension/retirement advice?

I don't want a salesman and am happy to pay for good advice.

I realise the general consensus on here seems to veer towards a DIY approach - which I'm all for, and have been reading The Money Doctor, TAB Guide, etc. as well as the posts on here - but there are some specific complications in my situation I'd like addressed (see my previous posts).

r/irishpersonalfinance 2d ago

Retirement 27 - 20% tax on current pension fund for cash? or carry over to new employer pension fund?

2 Upvotes

Looking for some advice on this. I'm not looking for a decision to be made for me but would appreciate input from anyone with more of an understanding of pensions.

Pension fund is only about 10,000

My previous employer made contributions, however, I left for pastures new a while before the cut off so didn't gain any of those contributions (had to be paying in for 24 months)

Option 1 - take the 10k with 20% tax for my own personal use to put toward a deposit for a home for instance or other investment opportunities.

Option 2 - Carry this over to my new employer based pension fund.

I seem to be able to justify option 1 as it may be useful as a deposit even with the 20% hit.

Having more difficulty justifying option 2 as in my head unless In a riskier pension fund, if the 10k doesn't appreciate in value in said fund (not guaranteed either way) it would be pretty worthless once I reach retirement age, with inflation and fees etc.

Any more insight on why I should go with option 2 and not option 1?

r/irishpersonalfinance Nov 03 '22

Retirement For those of you who chose the "high risk" pension option 10 years ago... how's it going?

19 Upvotes

Better than the safe option of your pension?

I'm currently in the high risk one, and have 30 years to retire. I'm not worrying, plenty of time. Just curious.

P.s. my one is global equity, about 60% USA. Top 10 holdings include Amazon, Tesla, Microsoft.

r/irishpersonalfinance 16d ago

Retirement Can self-employed or contractor leverage executive pension?

2 Upvotes

I want to contribute much more than 15% to my pension. If I have a choice of employment type should I be self-employed instead of regular employee to leverage 67% tax relief or executive pension is not applicable here?

r/irishpersonalfinance 4h ago

Retirement Special contribution in Exec Pension

3 Upvotes

Setting up a new pension, there is an option for a one off special contribution based on "Service to date"

Does this need to be contributed when the pension is set up initially?

Or would it also be valid to contribute it anytime before end of 1st company year?

r/irishpersonalfinance 17d ago

Retirement Aviva pension - why does it take so long for payments to be applied?

4 Upvotes

For example my pension comes out of my payslip and sometimes it takes 2+ months before the value is seen in the online account.

Currently my last updated payment on the online portal is 01/09/2022, i've raised this before and they confirmed its normal but i'd just like to know why it happens?

Cheers folks

r/irishpersonalfinance 19d ago

Retirement How to find details of past pensions

15 Upvotes

Hi, my wife has had a few jobs in the past when she was younger but she has no details of the pensions that she paid into. Is there somewhere that this info is stored or a way to track them down? Thanks.

r/irishpersonalfinance 24d ago

Retirement Access Pension funds early?

3 Upvotes

Hi, I left the private sector a few years ago. I was paying private pension 15k - in the public sector now.

Is there anyway way I can access a % of that money ?

They only give me a transfer option with the following options

You may transfer the value of your retirement account to one of the following: - an exempt approved occupational plan with a new employer; - a personal retirement bond with an insurance company; or - a personal retirement savings account (PRSA), subject to certain restrictions.

I've no idea what they mean - any advice would be great.