Looking to retire in 30-40 years and wondering about the Irish State Pension? Well, buckle up – you’re in for a surprise!
According to projections by the Irish Central Statistics Office, the number of people aged 65 and over is expected to increase from around 720,000 in 2021 to over 1.6 million in 2060.
Additionally, the cost-of-living crisis is turning into a cost-of-retirement crisis as rising food and energy prices mean the amount of money you need to retire at a minimum living standard has increased by almost €2,000 in the last year.
The Irish government are considering options to address the discrepancies but will have to make significant investments in the State Pension to ensure that it remains sustainable and provides adequate support for older adults.
As of 2021, the full State Pension reaches up to €248.30 per week (for those who qualify).
Ask yourself – would this be enough? Aside from the day-to-day costs of housing, food, car, clothing and healthcare, do you have larger plans for your retirement years. Do you have any expensive hobbies or travel plans? What is your lifestyle like now and do you plan on making any changes during retirement?
Considering these figures, it’s unlikely that even the scrapped plan of increasing the pensionable age to 68 (from 2028) would have covered the country’s pensions bill.
It comes down to how much you think you will need to support yourself and your family after you retire and will the State Pension be enough. The likely answer here is not by a long shot.
What can I do?
To ensure that you’re able to maximize the benefits of the State Pension and avoid poverty in retirement, it’s important to plan ahead and start saving for retirement today. This means putting money aside in a pension plan or other retirement savings vehicle. The earlier you start saving, the more time your money will have to grow, which means that you’ll be able to benefit from compound interest and potentially earn a higher return on your investments.
In addition to saving for retirement, it’s also important to consider other factors that can impact your retirement income. For example, if you’re self-employed, you may need to pay higher contributions to qualify for the full State Pension. You may also want to consider other sources of retirement income, such as investment income, to supplement your State Pension.
Finally, it’s important to keep up-to-date with changes in government policies and economic conditions that can impact the State Pension. For example, the government may change the age at which you’re eligible to receive the State Pension, or they may change the amount of the pension based on changes in inflation or economic conditions.
If you’re planning to retire in the next 30-40 years, it’s important to understand the Irish State Pension and plan ahead to ensure that you’re able to maximize its benefits. By saving for retirement early, considering other sources of retirement income, and keeping up-to-date with changes in government policies, you can enjoy a comfortable retirement and a reliable source of income.
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