In this part of the Country at least (Wexford) it is a wet, miserable day and the fleeting thought of the luxury of retirement might have passed your mind this morning!

Retirement can be luxurious in terms of being able to recapture some of that long sought after time we look for during our working years, when there never seems to be enough time!  Time to go on long walks, meet friends, play golf, travel to those beautiful sunny destinations, and whatever else might catch our fancy!

Financially however, retirement can be far from a luxury.

Friends First recently completed a study into retirement income in Ireland (October 2016).  The study found that the average person needs €9,810 a year to make ends meet when they retire.  As from March 2017, the State pension will be €12,392 per annum.  Assuming we need the sum of €9,810 as above to cover living expenses, that leaves approximately €50 for ourselves, after paying all our bills, assuming the State pension is our only income.

It is clear the state pension is there to provide the essential minimum income we need to live on.  However there will be little left to allow us that luxurious lifestyle in retirement we dream of.  There will most certainly not be any nice holidays.

As a guide how much should we save for our retirement?  As a general guideline, you should aim to retire on a pension equivalent to two thirds of your salary.  If we assume a salary of €40,000 that means that after the state pension entitlement, you should look at saving for an annual pension equivalent of €14,274.  As a 30 year old, contributing circa €600 per month (after tax relief) should give you the fund to buy this pension for you.  Of course, the older you are when you start saving into your pension, the more you need to save.  For example if you leave it until you are 40, you will need to save approximately double that sum at €1200 (after tax relief).

But as with most things in life, some savings are better than nothing and it is better to have some element of pensions savings, than none at all.

If you are concerned that you are not going to meet your pension needs target in your retirement, do contact us to discuss your options and how you can put a plan in place to put you back on track.


This is an opinion only and does not constitute advice as individual circumstances will determine all financial advise given.