The projected fund value is likely expressed in terms of today's prices ie: they've reduced it by a predicted inflation rate.Hi
so i was dreaming of retiring and was playing around with the pensions authority pension fund calculator.
I noticed that when you go from 24 years left to 23 years left to retirement, that their calculator tells you that the fund accumulated is LESS than the contributions made over that period.
Eg put in 20 years left to retirement (you need to put in your age and desired retirement age). That means 240 contributions. for ease of numbers use 1000 a month. doing this, their calculator tells me the fund is worth 230K at retirement, even though you've contributed 240k. Something doesn't add up on this. View attachment 7924
There should be a link to the assumptions used when you get to the result. From memory it assumes a switch to bonds for last 10 years, but it should detail the growth rates.Apologies I thought I had added the link. The calculator I'm referring to is below
There should be a link to the assumptions used when you get to the result.
Agreed. Doesn't make any sense, though possibly not an answer to OP query. OP query would seem to be addressed by this inflation adjustment though I haven't checked and given the above (a)shambles I wouldn't bet money on the calculator being right.The calculator is broken from what I can see
I tried to check it by the simplest test - one year of contributions 833.33 x12 = 10000 - one year to retirement. Need to click on the "?" to get the breakdown. If they can't get this right it means they've not tested the calculator in any sort of systematic way or perhaps at all.
If the current age is 66 and retirement age is 67 that gives (for 10,000 in contribs)
Projected accumulated employee contribs 4709
Projected accumulated tax savings 0
Total 4709
If the current age is 64 and retirement age is 65 that gives (for 10,000 in contribs)
Projected accumulated employee contributions 2285
Projected accumulated tax savings 1883
Total 4709
If the current age is 63 and retirement age is 65 that gives (for 20,000 in contribs)
Projected accumulated employee contributions 8345
Projected accumulated tax savings 5564
Total 13309
It would be easier for them to not try to show the tax savings in the way they do. That 4709 for a one year 10k investment is close to the net income from 10k which may or may not be coincidence.
But a pension calculator that estimates that putting in 10000 into a pension will be worth 4709 next year has a problem.
https://www.pensionsauthority.ie/en/about_us/the_pensions_authority/ - no comment.
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