With more of us living longer than ever, it’s time to ask - how do we make our savings last? A pension is a great way to fund the retirement you want, giving you an income beyond the basic State Pension. Here’s what you need to know to start planning for a secure future.
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What is a pension?
Think of a pension as your personal future fund - a pot of money that grows over time, designed to support you when you’re ready to leave the workforce. It might come from your employer (workplace pension), your own savings (personal pension), or the government (State Pension).
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Picture your dream retirement
A little seaside cottage? Monthly trips to European capitals? Or just more time for family and hobbies? Whatever your ideal retirement looks like, imagining it now can help you plan. Research shows that visualising your retirement makes saving feel more real and helps you stick to your goals.
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Don’t count on the State Pension
The State Pension is a solid foundation, but at currently just over €15,000* a year, €289.30 per week, it might not be the same as what you are used to earning each year. Your own pension savings are what will give you the freedom to live the life you want.
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Plan for a longer life
We’re living longer - and that’s great news! But it also means your pension needs to stretch further. Books like ‘The 100-Year Life’ by Lynda Gratton and Andrew J. Scott highlight the importance of rethinking how we work, save, and spend to embrace these longer, more dynamic lives. Start saving today, to keep your options open tomorrow.
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How much do you really need?
Aiming for two thirds of your current income in retirement is a good rule of thumb. For instance, if you earn €40,000 a year, aim for around €28,000 to €32,000 a year in retirement. Use our retirement calculator to check if you’re on track. And don’t panic if the numbers seem daunting - regular contributions and the magic of compounding make it all possible! Compound interest is when you earn interest on the money you save and on the interest you earned along the way.
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Why pensions beat savings
Pensions don’t just sit there; they grow. Compounding, tax relief, and employer contributions all make pensions more powerful than your average savings account. It’s like getting extra money working in your favour, provided you contribute.
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Make your pension work harder
Got pensions from old jobs collecting dust? Consider consolidating them to simplify things and avoid extra fees. If you can, increase your contributions. Even a little bump can have a big impact thanks to compounding over time. Plus, pensions are designed to grow over the long term, which helps protect your savings from the eroding effects of inflation - something regular savings accounts often struggle to do.
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Your pension is your ally
Make sure its allocation aligns with your plan, age, and risk tolerance. Younger people can usually take on more risk for higher growth potential, while if you’re closer to retirement you may prefer a more stable, lower-risk portfolio.
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Life happens, but don’t let it stop your pension
Career break? Stay-at-home parent? You can still keep your pension growing. If you’re not earning, talk to your partner about contributing to your pot - it’s a team effort, after all.
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Check-in regularly
Schedule regular 'money dates' to review your pension and make sure it’s still working for your goals, especially after big life changes like a new job or a growing family. Keep things simple and focus on the long-term because there’s no need to stress about short-term market swings.
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Help is always at hand
Pensions can feel complicated, but you’re not on your own. Bank of Ireland offers tools, resources, and expert advice to help you plan with confidence. Retirement might feel far away, but a few smart steps today can make all the difference tomorrow.
Takeaway: Your pension isn’t just about saving - it’s about creating the freedom to live your best life in retirement. Start now, plan wisely, and give the future-you the retirement you deserve.
Next Steps
*Source: Applying for the State Pension (Contributory)
