Newbie 0 #1 January 10, 2005 I don't have one - i'm 30 this year. I'm kind of worried i should perhaps have one. I work in the public sector currently and have done for 2 years but opted out of the pension scheme straighaway (which i'm now sort of regretting). Just had an informal chat with my boss/colleagues in the office about the fact i don't pay into a pension and never have done...and er, well i'm starting to think i've been a bit short sighted. It's not like i have money to burn, and after having some fairly significant outgoings recently (non skydiving related) i haven't even had a chance to think about trying to put money away. I was trying to put away 15% of my net income, which i did manage to do, but marital related expenses sort of put an end to that Anyhoo, should i be worried i don't have a pension at almost 30? What sort of corrective actions can i take to make sure im not eating cold beans out of a can aged 65? I work for my local council (government) and apparently the pension contribution is quite a bit safer/better than the private sector but i have no real facts on this other than what my boss has said (she has just hit 60 and pensionable age, and seems quite knowledgeable about this, having done both private and public sector work). Any guidance is as always, appreciated. "Skydiving is a door" Happythoughts Quote Share this post Link to post Share on other sites
gordy 0 #2 January 10, 2005 I currently don't like yourself, and my decision for that was based upon that fact that I am not entirely certain how long I will be in my current job, and at the moment I am trying to get rid of a lot of the debt that I mounted up while I was at uni so my monthly income is quite important to me.... The currently plan was to take one out with my next job, but thats just me... Quote Share this post Link to post Share on other sites
Ron 10 #3 January 10, 2005 Yes you should be worried you don't have a pension. An IRA would be a GREAT idea. Some can be started with less than 100 a mth. Any amount is a good idea. Me? 32yo I have a pension with my company (Vested with 14 years). A 401k (since I was 21. 15% going in right now...Avg was 10%) 5% I buy stocks with on a drip plan. I don't have all the toys I want, or do all the things I want...But I have no CC debt and am not selling my future to play now."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
Newbie 0 #4 January 10, 2005 what's an IRA? "Skydiving is a door" Happythoughts Quote Share this post Link to post Share on other sites
racer42 0 #5 January 10, 2005 It would be reeeal smart for you to start investing in something a 401K, annuities, the stock market, whatever. Watch out for high fees and volatilty. But now is the time. Start with 10% of your monthly growth and go from there.L.A.S.T. #24 Co-Founder Biscuit Brothers Freefly Team Electric Toaster #3 Co-Founder Team Non Sequitor Co-Founder Team Happy Sock Quote Share this post Link to post Share on other sites
Newbie 0 #6 January 10, 2005 i'm in the UK so we don't have 401k's here (although i was under the impression this was actually just another form of "pension" which is what we get here). Could be completely off on that though. "Skydiving is a door" Happythoughts Quote Share this post Link to post Share on other sites
Ron 10 #7 January 10, 2005 Quotewhat's an IRA? Individual retirement accounts . There are two types: Traditional, and Roth. Traditional-Depending on your specified circumstances, contributions to a traditional IRA may be wholly or partially tax-deductible or entirely nondeductible. A nondeductible IRA contribution is permitted regardless of income. Deductibility of your contribution depends on your AGI, and whether you or your spouse, or both, are eligible to participate in an employer-sponsored retirement plan. Contributions are not permitted after you reach age 70 1/2 , and minimum distributions must begin at that age. Two special situations apply to married couples filing jointly. First, if one spouse's employer offers a retirement plan and the other does not, the spouse that is not covered may make a deductible contribution to a traditional IRA if their combined adjusted gross income does not exceed $150,000. Deductibility is phased out between $150,000 and $160,000. Second, a spouse who does not work outside the home can still qualify for a full $2,000 IRA contribution, as long as the total of the two spouses' IRA contribution does not exceed the lesser of the earned income of the employed spouse or $4,000. Roth-Contributions are not tax-deductible. Money in the IRA grows tax-deferred and all the money distributed is exempt from federal income taxes if you hold the account for at least five years and if you are at least 59 1/2 at the time of distribution or you die or become disabled. Contributions may continue after age 70 1/2, and no minimum distributions are required during the account holder's lifetime. Most tax experts advise people to carefully consider the advantages and disadvantages of a Roth IRA Boil it down to Traditional is most times pre tax and you pay taxes on it when you withdraw it. Roth is after tax but the money grows tax free. Any bank can set you up with one and they normally require a min monthly contribution. They can be invested into a bunch of ways with various degrees of risk from "T" bills to volatile international stocks. Talk to your local bank. BTW this is for the US...If you are someplace else.....I can't help. Anyone?"No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
sunshine 2 #8 January 10, 2005 I have one through work. We don't pay into it and i honestly know nothing about it or how it works. I get a statement once a year but i don't pay attention to it. ___________________________________________ meow I get a Mike hug! I get a Mike hug! Quote Share this post Link to post Share on other sites
Newbie 0 #9 January 10, 2005 thanks Ron but yeah i'm currently in the UK (although married to an American so might well find myself stateside at some point). "Skydiving is a door" Happythoughts Quote Share this post Link to post Share on other sites
racer42 0 #10 January 10, 2005 Check and see if you can invest outside the UK.L.A.S.T. #24 Co-Founder Biscuit Brothers Freefly Team Electric Toaster #3 Co-Founder Team Non Sequitor Co-Founder Team Happy Sock Quote Share this post Link to post Share on other sites
Ron 10 #11 January 10, 2005 Quotethanks Ron but yeah i'm currently in the UK (although married to an American so might well find myself stateside at some point). Still talk to your local bank. I am sure there is something like that over there. At any rate invest in your own future. Even if it is just tiny amounts of money it helps."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
gmanpilot 0 #12 January 10, 2005 Old people tend to give pretty good advice. This old fella once gave me a simple recipe for living and retiring comfortably. 1. Get a decent job with a good retirement pension. 2. Fully fund your 401K (or similar). 3. Have your house paid off before retirement. 4. Set aside a little extra for investment in stocks. 5. Don't use credit. I know I don't have the discipline to do it all on my own, so I make it as "automatic" as possible. I don't even own a credit card, and everything else comes out of my check before I see it. I just hope the interest rates go up by the time I retire, cause I'll need several million to maintain my standard of living. _________________________________________ -There's always free cheese in a mouse trap. Quote Share this post Link to post Share on other sites
IanHarrop 42 #13 January 10, 2005 You don't need one... see this thread http://www.dropzone.com/cgi-bin/forum/gforum.cgi?post=1426588#1426588"Where troubles melt like lemon drops, away above the chimney tops, that's where you'll find me" Dorothy Quote Share this post Link to post Share on other sites
freeflir29 0 #14 January 10, 2005 You might also Google some info on investing in Bermuda. I haven't done it yet but the returns are slightly above average and the laws are VERY investor friendly. Quote Share this post Link to post Share on other sites
usskydiver 0 #15 January 10, 2005 When I retire on 1 Apr 05 I will receive 50% of my base salary for life, minus health and life insurance. Additionally I have a Roth IRA and no CC debt. I use a CC but only with the money in the bank to back the purchase. I'm living very simply now so I save approx 50% of my salary. Quote Share this post Link to post Share on other sites
ladyskydiver 0 #16 January 10, 2005 Nope. I do have two 401K's, an IRA, and a savings account, however. And my CC, I pay off monthly so no worries there. Debt to income ratio is almost non-existent. Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile. Quote Share this post Link to post Share on other sites
skytash 0 #17 January 10, 2005 CAVEAT - I work for the Pru so it could be argued that I'm posting this in my own interest, but this is not a post in my professional capacity (I work in life assurance not pensions) I would agree with others that having a pension is a good thing. The UK state pension doesn't pay much more than Income Support. I think you have various options in your case: - you can join the council scheme, chances are that you will have the option of two providers, compare them see who you feel more comfortable with. Also find out what happens if you leave the job. Some allow you to take the money out and put it into a pension plan from another employer, others make you leave it with them until you retire. - if you earn less than £30,000 (I think - check with an expert like a sales person from a pension company or an IFA) you can also invest in a personal pension with any provider you want - I think in any case you can get a stakeholder pension, but not many providers offer these on a regular payment basis as they often don't make enough money to cover the cost of administering them When I get back into the office I'll send you the details of the Independent Financial Advisor Association. You can call them and they will let you have details of IFAs in your area. There are two types of IFA - those which are free for you and are paid by commission, even if not the individual advisor, the company will. From what I've seen at my end of the deal they can be influenced by commission rates, so you may want to speak to two or more before making a decision - those who you pay for their time. They also get what is called trail commission which pays them a small amount after the sale, but this is significantly lower than the upfront commission the other type get. They actually make their money from the fee you pay. They are less likely try to encourage you towards a provider who pays high commission. Most providers also sell direct. I personally would meet an IFA or two, then make my choice and buy direct. But I work in the industry and understand how many of these things work. That way you may get the commission which would be paid to the IFA put into your pension. Beware though, if you choose this route you will never be able to make a claim for any form of misselling as you made your own choice. You didn't enter into a contract with an advisor and hence can't claim for bad advice. The other thing about IFAs is, they can be quite scary about how much you need to invest to have a good retirement. I personally put 18% of my gross income into my pension which according to my IFA is just enough as long as I pay off my mortgage before I retire. Have a look at what is available to you. If you want anything explained, PM me. tashDon't ever save anything for a special occasion. Being alive is a special occasion. Avril Sloe Quote Share this post Link to post Share on other sites
VectorBoy 0 #18 January 10, 2005 Quotewhat's an IRA? A wingsuit boogie organizer in the socal. Quote Share this post Link to post Share on other sites
slug 1 #19 January 10, 2005 If you do some googling you'll find out that by not starting a retirement plan untill your advanced age vs 18 y.o. . Your going to have to play catchup You've lost out on the benifit of compounding and dollar cost averaging of your investments for the last 12 yr's. Don't worry you can still get where you want to be just start doing some research now. The longer you wait.... you know the deal. R.i.P. Quote Share this post Link to post Share on other sites
flyhi 24 #20 January 10, 2005 Quote5% I buy stocks with on a drip plan. Care to share what you are drip' ing in? Just checking to see if we read the same site. And I think those are an excellent option. Some DRIP's allow you to go as low as $25 an investment. I bought my kids, during their badass period, one share of Harley Davidson (They have a DRIP plan) through the Moneypaper one Christmas. Since then the stock split, and is back over the price I paid. I bought none for me. So who was that joke on? QuoteMe? 32yo Isn't that too young to be a curmudgeon?Shit happens. And it usually happens because of physics. Quote Share this post Link to post Share on other sites
Ron 10 #21 January 10, 2005 QuoteCare to share what you are drip' ing in? Just checking to see if we read the same site. No site, was given some info froma friend and it seemd a good idea... If ya know some good sites....Please share. QuoteIsn't that too young to be a curmudgeon? No, I started early so I could be good at it when I get there."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
mnealtx 0 #22 January 10, 2005 Quote If ya know some good sites....Please share. No, I started early so I could be good at it when I get there. www.fool.com www.morningstar.com Fool is especially good, they have a LOT of free info on debt reduction, getting started in investing and the like.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
flyhi 24 #23 January 10, 2005 Back when they first got started, the Motley Fools advocated Dividend Reinvestment Plans (DRIP) on their site. Their plan was to invest $50 a month for 20 years and end up with $150K. Later even they admitted it was very aggressive (~15% return, I think) and they doubted it would have worked. Their recommendations at the time were Intel, Mellon Bank, Pepsi, Paychex, and Johnson and Johnson. Since then they rethought their approach (I think they wanted to be a more profitable site. But I too can be a curmudgeon.) and dropped that portfolio. Anyway they lay out how to get into DRIP's and expound the virtues. I concurred with their choices at the time and threw in Conagra as a cyclical. They evaluated it compared to Pepsi and poo poo'd Conagra, but it has been doing pretty well thus far, steady but not spectacular. It made 2000 and 2001 easier to take. This is not advice for anyone to invest in these stocks. Do your own research. Even the Fools will tell you that.Shit happens. And it usually happens because of physics. Quote Share this post Link to post Share on other sites
Ron 10 #24 January 10, 2005 Quotehttp://www.fool.com http://www.morningstar.com Fool is especially good, they have a LOT of free info on debt reduction, getting started in investing and the like. Let me get this straight....You want me to invest based off a a website name fool? Thats like learning to skydive from a place called "Bounce", or "High Impact Sports"."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
mnealtx 0 #25 January 10, 2005 QuoteQuotehttp://www.fool.com http://www.morningstar.com Fool is especially good, they have a LOT of free info on debt reduction, getting started in investing and the like. Let me get this straight....You want me to invest based off a a website name fool? Thats like learning to skydive from a place called "Bounce", or "High Impact Sports". And who's advice did the King listen to? The Fool's.... he didn't have to curry favor. Go check it out...you'll see.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
