Podcast125: Why Most Pensions Are A Waste Of Time, Unfortunately

The title of this piece may seem overly alarmist, however it is my firm belief that most pensions that people here in Ireland have are really ineffective and the investors would quite possibly be better off doing something else with their funds. Are pensions useful? Absolutely they can be hugely useful (read here for 1 example!) however if they are entered into in a half-baked way they can be pretty useless, and unfortunately I have seen it far too many times.

We all see lots of articles and blogs and media mentions of not enough people having pensions etc etc, however it is also true that getting a pension just for the sake of it is not necessarily the right solution. In this article I hope to share insights which will potentially help you avoid getting into something that is of no value nor use to you, and give you a good chance of getting into something that stands a strong probability of being of real value to you.

What Is The Average Pension or Retirement Income In Ireland?

It really depends on what survey or research you are relying on but I have seen various figures quoted. Some say that the average pension pot for those retiring is €60,000 and other 'research' that puts that figure at €90,000. Either way I am not sure how those figures are arrived at, but my experience would suggest that for those that have pensions it may indeed be an average of that sort of level. Some have pension pots of €20,000 and others have pension pots of €1m or more, so it varies greatly! Depending on the size of the pot, the level of volatility you are exposed to and the number of years over which you intend to draw that income, you'll have a varied retirement income available to you.

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Paddy Delaney.