1. You may need an income for up to 30 years or more after you retire
People are living longer which means you may be retired for up to a third of your life. That’s why it’s so important to have a savings plan that ensures that the money you earn during your working life lasts your whole life. Your pension plan is one of the most important savings plans you will ever save into. It can provide you with an ongoing income to ensure you have the money you need to enjoy your retirement years
2. Your income could drop by over 70% in retirement
When you retire, you’ll probably assume that you will have the same standard of living. However, unless you put a pension plan in place, your income could drop by over 70% in retirement. The State Pension (Contributory) is currently €12,131 a year (€233.30 a week), but the average salary in Ireland is €45,075*. You need to start saving for your retirement to help avoid a big drop in income, and the impact this would have on your lifestyle
3. If you qualify for the State Pension, you could be 68 before you receive it
The age of eligibility for the State Pension (Contributory) has changed and no longer starts at age 65. If you were born on or after 1 January 1961 the minimum qualifying State Pension age will be 68. That’s potentially a three year gap in retirement
€36,393 is the estimated shortfall in retirement income over three years due to change in minimum qualifying age for the State Pension (Contributory)
* Source: CSO, Average annual earnings for full-time employees in 2015, Earning and Labour Costs 2015.
Written by
Sean Guinan