Pension Calculators

On the back of todays report from the Pension Council I wanted to see how I was doing in comparison to their numbers using the pension planner on my pensions website (AON).

1. First I need to choose between an Approved Retirement Fund "Flexible Spending" and an Annuity Fixed Income.

I don't know much about either but chose an Annuity Fixed Income to get things going.

First Q.
How much annual income do you think you'll need in retirement? (per year before tax)

Thats the 33k right! Well actually I need a pre tax amount not the post tax so I set it as a guess to 38k.

I can then play around with the Contribution %, Lump sum and retirement age. Although I can't vary the % to increase as I get additional relief.

For the Flexible Spending it seems to need to post tax of Net Flexible Spending as it calls it.

The fixed lump sums are different for both.

Here are the assumptions it states.

"All figures are displayed in today’s money terms, which simply shows you what your future benefit would buy you now if you took account of inflation between now and when you retire using an assumed discount rate of 3%.

The projection assumes a maximum investment return of 5.75% p.a. but the exact return assumed for you is calculated by reference to the asset mix in the funds held in your Retirement Account. The Projection assumes you do not change this mix of funds in the future. "

What does this mean?

"what your future benefit would buy you now if you took account of inflation between now and when you retire using an assumed discount rate of 3%."

Is it building in an increase in contributions based on salary increases over the next 15 years?

I reckon it's suggesting 'this number is what your future retirement number will feel like'

So if 33k today inflates to 44k by your retirement date they are trying to show you that you will be as wealthy then as someone is today, on 33k

Don't forget the State Contributory Pension.

Fibbernacci said:

I reckon it's suggesting 'this number is what your future retirement number will feel like'

So if 33k today inflates to 44k by your retirement date they are trying to show you that you will be as wealthy then as someone is today, on 33k

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I can certainly see the advantage of that number. As it’s difficult to know what you might need in 25 years. It’s somewhat possible to see what you would need now if you take away mortgage and childcare.

But it kind of mixes apples and oranges if thats what it’s doing as it shows me my future pot at retirement based on assumed growth.

Must look at the numbers a bit more or are there better calculators out there that show workings.

Dave Vanian said:

Don't forget the State Contributory Pension.

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Yes included.

It’s kinda scary how much you need to contribute to equal the pension. Just shows the value of it.

faketales said:

Yes included.

It’s kinda scary how much you need to contribute to equal the pension. Just shows the value of it.

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Case Study 1 - A 66 year old single male who has a pension fund on retirement of €400,000 and a mortgage-free home worth €400k.

He is getting about €17k a year in the OAP. That is the equivalent of a lump sum of about €400k

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