24th October 2016
I am very fortunate to have plenty of friends, and lots of acquaintances. I really consider this one of the gifts of life, to have such an eclectic mix of people in one’s life. It leads to lots of fun, variety and entertainment generally! One such friend, who is a very educated and academic individual recently advised me that he was never going to buy (nor start, invest or join) a pension because they are ‘a pure and unadulterated torture, I’d rather buy sheep’! I was a bit stumped initially, and then massively amused as i pictured the scene!
To me, this valid perception points to the very problem with pensions in general; people don’t engage with them, and this is reflected in the fact that unless one is enrolled in an Occupational Pension Scheme in work the take-up rate is shockingly low. The Irish Government and many State Bodies are terribly worried that Irish pensions are at such a low take-up level, indeed so is everyone except those that aren’t in one!!
Here are 5 undeniable facts for you about pensions:
1) People don’t understand them
2) They are a pure torture and complex, even for the experts
3) There are charges to be paid on all pensions, sometimes hefty ones which can erode up to 25% (or more) of the final fund value
4) You may lose a good chunk of money you save if ‘things’ go ‘south’ and you have a knee-jerk reaction
5) You may pay tax on the way out, effectively reversing a lot of the tax relief you got on the way ‘in’
If you weren’t already, then you certainly aren’t a fan now! But this is only one side of the story, after all, there is more than one way to shear a sheep!
Here are some more facts for you to consider about pensions:
We can dig deeper and make this complex, we really can but I’m not going there, there’s no need right now. I want you to understand the principle of retirement planning via pensions.
It can be really straight-forward, it can be effective, it can give great returns, it can be the right way to go about it.
To finish on more facts; It is cleaner than sheep, less noisy, and ultimately should keep growing for you well after the poor oul’ sheep has met his maker….
As always, thanks for reading and sharing.
Please do get in touch with any specific topics you want ‘covered’ (no pun intended!)
Finally, here’s a link to Irish Consumer Advice site, focusing on the basics of pensions, what to consider and how to start looking. Definitely worth a look……..
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