Key Post Excel spreadsheet to project size of pension fund on retirement.

[interested21]

Do you have an Excel spreadsheet for this into which people could input their own figures?

Sure - it's a bit rough and ready but it can be accessed here. Just make a copy and edit with your own figures. Assumptions and viz are in the first tab and the raw numbers are in the second tab



Edit: Attaching an Excel version for anyone who prefers that.

 

[Brendan Burgess]

Hi interested

That is great.

So, it starts with a pension fund of €70k at age 30

The default growth seems high. 4% would be a better estimate.

But even with that, it shows that someone contributing the maximum is likely to blow their SFT .

But at 55, they could reduce their contribution to 7% and it would still exceed the SFT.

Brendan

 

[help999]

Hi interested

That is great.

So, it starts with a pension fund of €70k at age 30

The default growth seems high. 4% would be a better estimate.

But even with that, it shows that someone contributing the maximum is likely to blow their SFT .

But at 55, they could reduce their contribution to 7% and it would still exceed the SFT.

Brendan

Hi Brenden how does one start with €70k at age 30, is that a €70k pot built up by age 30.

Also the File doesn't allow for a max salary input, in my company we have salary bands once you reach that your salary doesn't go up more, that will be well reached in next 7 years a long time before retirement age.

 

[Brendan Burgess]

how does one start with €70k at age 30, is that a €70k pot built up by age 30.

Hi help

That was not my choice.

They are the defaults set into the model set up by @interested21

 

[help999]

Think you Brendan, I will change to suit my own circumstances.

 

[ClubMan]

One small thing to note about the age related tax relief limits is that they kick in in the year in which you reach the relevant age. So, even if you turn 55 on December 31st 2022 you are entitled to full tax relief on 35% of your income for the full year 2022.

Tax relief for pension contributions

This page outlines the tax relief for pension contributions

www.revenue.ie

 

[Brendan Burgess]

Let's be clear about what this spreadsheet is.

It's a projection about what the size of the pension fund will be in 20 or 30 years.

There are many assumptions about growth in salary, continuation of tax relief and investment returns.

You should never add a more precise measure to a less precise measure - so don't worry about "one small thing" in such projections.

Brendan

 

[NoRegretsCoyote]

You should never add a more precise measure to a less precise measure - so don't worry about "one small thing" in such projections.

Fully agree.

Investment returns over a 40-year horizon are subject to huge uncertainty and you won't know if you are at risk of hitting SFT realistically into your 50s, and the SFT might change too.

The best anyone can do at any age is maximise tax-relieved contributions and take full advantage of employer matching.

 

[ClubMan]

I'm not sure that an average of 6 months of an additional 5% of income compounded over decades would be negligible?

But moderators delete this and my other post if they are off topic.

 

[NoRegretsCoyote]

I'm not sure that an average of 6 months of an additional 5% of income compounded over decades would be negligible?

Not negligible, but dwarfed by assumptions you have to make about returns.

 

[Brendan Burgess]

But moderators delete this and my other post if they are off topic.

Not off topic at all.

It's very instructive. A lot of people spend ages working out detailed calculations about long-term forecasts, so it's worth pointing out that it is incorrect to do so.

Brendan