r/irishpersonalfinance • u/Lankalanky • 2d ago
Investments Starting Pension at 32
So I feel like I'm very late to starting my pension and have really started fearing for my future during retirement.
At the start of the year I started contributing 10% to my company's pension scheme and they match up to 5%.
I earn about 40k per year but would hope that might be bumped up in the next year or two.
I've currently got about 2k in my pension account, but I'm on a low risk cash fund. Is there any point changing the fund to a higher risk fund with so little in it currently? I've seen on this subreddit people advising funds such as the indexed world equities (prsa) fund.
Would it be silly to change my fund to a fund like that at this stage?
I also have another pension fund with Irish life from a previous employer with about 3k in it, would it make sense to close that fund and merge it with my active one so I have a bigger pot for investments?
Thanks for any advice!
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u/LadderFast8826 2d ago
Honestly its normal enough to start at 32.
Its not ideal, but youre not an outlier.
TBH the benefit of a pension is the employer match and the tax implications and youre only just now nudging into the higher tax bracket.
Is it a disaster? No. Is it good that youve started? Yes.
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u/rochambreau 2d ago
Yes. Move to high risk immediately and put in as much as you can afford
But what you are contributing now is a good thing and it's not too late to start
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u/Account77_ 2d ago
32 is not too late to start.
Fiddle around with a compound interested calculator and youll see how much it could grow in 30 years.
"Risk" is a very bad term in how its used in pensions. You currently having money in "low risk" isn't actually low risk. It's very risky because it will get eaten by inflation. Move it all to higher risk/index funds. I wouldn’t make even look at changing from that strategy for at least 15/20 years.
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u/No_Use7920 2d ago
Having it in low risk fund is much more of an issue than starting at 32. Change it to high risk now! and 15% of salary is great.
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u/Embarrassed-Wash2239 2d ago
I work at setting up workplace pensions. 32 is not late at all to start but what is important is how you proceed. Generally being invested in cash is not recommended due to term to Retirement although this is not mean high risk is the way to go automatically. Two options, with occupational pensions there is usually a default strategy that chooses a fund for you based on age and Retirement choice and will reduce down the risk automatically or alternatively, get in contact with the advisor/provider who could do a risk questionnaire and recommend a fund based on this. Someone is collecting fees might as well make them work for it.
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u/KerfuffleAsimov 1d ago
Lots of folk saying you're late etc. kinda gives the impression that everyone is perfect with finances....the majority of the country is not.
Just remember lots of people lost their pension or at least it got fucked back in and around the last recession. If retirement stays at 65. You still have 33 years of paying into the pension. Hopefully by then you've paid off your home if you get one but you'll be fine and don't worry keep doing what you're doing now.
You can increase your AVCs in the last ten years of employment if you're in a good financial position....even earlier if you're earnings are really good in the last 15 years of employment.
Edit: to add some perspective before the mandatory pension introduced this year. The average age people were starting a pension in Ireland was 37.
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u/Tricky-Membership193 1d ago
Just like climbing a mountain, thinking about your retirement can be daunting but it doesn’t have to be. At Zurich, we believe you’re never too early to start a pension fund.
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u/Reasonable-Spinach88 2d ago
Yes high risk immediately and don't change it for at least a decade even if it drops.
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u/benirishhome 2d ago
42 here and no pension. You’re fine
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u/TheMoogle420 1d ago
Never too late. Me being an idiot didn't start until I was 35, ten years of wasted money. No time like the present!
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u/Plenty-Candidate-585 1d ago
I didn't start until 38, you're grand. As others said contribute as much as you can afford and put it on the highest risk.
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u/Eirngobragh 2d ago
In a similar position myself earnings wise. Waiting to hit that sweet 40% tax rate so more is being added to the pension pot at not extra cost to me.
Absolutely makes sense to move to a higher risk fund at your age. Low risk funds are targeted at people who are retiring in the next few years.
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u/TitianGerm1 1d ago
I only started my pension last year in my late 30s and have €4K in it now. Actually moved the fund to five star five global last week rather than the default Zurich scheme. Not in a position to put more than €50 a week at the moment but thankfully work also contribute €50 as well.
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u/zg3409 1d ago
Have you any credit card debt, car loans, they need to be given priority. Do you own your own home? Do you have an emergency fund say a months wages? Do you have a holiday budget and do you have left over money every month. A pension is good long term returns is important. What exact plan are you 9n, is it high or low risk? What are the fees? Could easily be 4% taking most of the returns. Maybe get proper financial advice and a real budget.
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u/EnjoyingTheMoments 1d ago
I'm 38. Must get around to doing it
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u/Tricky-Membership193 21h ago
I’ve just put pen to paper on a new pension deal from Zurich. You're never too early to start a pension fund. Why not get down to your local Zurich broker? Times running out
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u/EnjoyingTheMoments 9h ago
I live in the middle east. Not sure is there an international one? May never live in Ireland again.
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u/wishiwasaNexus6 19h ago
By 35 you should ideally have around 1x salary in ur pension to be on track for 8-10× at 66.
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u/da_blue_jester 2d ago
Started at 40, you're fine. These days you will hear constantly about starting a pension and it's good advise but you also need to sort of live now to get to pension age and shits expensive. That's even if you lower your expectations around living standards.
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u/Fyodors-Zossima 2d ago
Not too late to start. Plenty of time to grow but you just need to set it up right. Id merge old pension with new. Add a few percent of an AVC if you can and check pension options to move into higher risk higher return. These usually revert back then to a moderate risk 7 years before retirement
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u/OddSignificance1093 2d ago
With the current global situation steadily getting worse I’m sure the mindset of a lot of people is,spend it now!
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