Pensions Council: "€33k a year pension needed for 'comfortable' retirement"

Bronte said:
Doesn’t work for sandwiches though, as when de freezing they go a bit hard. Makes the best toast though, with Kerry gold.

We spend a lot on good food and eating out. But I did a big pot of Chili Con Carne two weeks ago, 30 portions only cost less than 1.50 a portion. I added it all up to see. Always hearing about free food parcels and poverty. Especially this time of year. You can live frugally and cut things out if necessary, but I don’t want to. I told the kids in college if they send me pics of proper home cooked food they will be bribed. Sadly is not working for the youngest who is constantly broke. One of them has their communion money, persuaded me that chat gp was a necessary student item that I must pay for, arguments were impressive and as they have a grad job lined up next September I said why not. Youngest thinks I’ll be persuaded to pay 500 extra a month next year in Dublin, living under a rock. Heading for “modest” pension if this continues.
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That's the thing. I get a kick out of living frugally, driving an old car etc but I'd hate to have no choice but to live that way.
I remember many years ago a story about some wealthy London socialite who chose to live on the same money as a single mother on benefits for a week to show it could be done. To mark the successful completion of her challenge, her friends took her out for a celebratory dinner.
 
jimmij said:
33k = 2.75k a month and assuming no rent or mortgage, I think I'd find it hard to spend that much every month on just myself.
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Fair enough, I guess I must have expensive tastes!

I think I’d struggle to live “comfortably” on much less than €40k per annum.
 
Bronte said:
I’ll be in Dublin tomorrow, but won’t have time to see you in Switzers.
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I'm guessing it's been a while since you've been in Dublin ;)

ClubMan said:
Judging by many posts and many Money Makeovers on Askaboutmoney quite a number of people seem to have no clue what amount of money they live on and have no idea what their overall and categorised expenditure is.
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Very much agree with you here Mr Clubman, recently here we had a poster and I must stress no offence to the poster this is just an observation
But they were talking about retirement and wondering if the 2 million pension fund they will have would be enough to retire on

fistophobia said:
We have to accept here, on this website, we are not the average Irish person.
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Think I'd have to disagree with you here, most of the posts I read here like the money make overs are very much in my opinion,
average people with the usual money issues that I'm sure most of have had to deal with at some stage of our lives

Sarenco said:
Fair enough, I guess I must have expensive tastes!

I think I’d struggle to live “comfortably” on much less than €40k per annum.
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Definitely not, comparing lifestyle choices is like comparing apples to oranges,
there are too many variables that affect what a person or couple needs finically to live on in retirement
 
Cervelo said:
Think I'd have to disagree with you here, most of the posts I read here like the money make overs are very much in my opinion,
average people with the usual money issues that I'm sure most of have had to deal with at some stage of our lives
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I'll argue this point based on very little more than my own opinions. :) 800,000 people working in Ireland who are not in any pension scheme at all. (The Auto Enrolment target market.) I'm going to speculate that we don't have too many of that group here on AAM. Average salary in Ireland is €45,000 per year according to Morgan McKinley. Being an average that means there's a huge number of people below it. (And yes I'm sure that there's plenty of overlap with the 800,000 non-pensionable folk.)

I would say that if you're earning less than €45,000 per year and paying for accommodation in some shape or form, you'd have very little disposable income after meeting the essentials. Accordingly I'd speculate that the majority of AAM regulars are on the north side of the €45,000 average line who have enough disposable income to be looking for advice on what to do with it to make good use of it.
 
SquirrelChaser said:
Those figures align with my own estimate of my retirement needs based on my current expenditure (including health insurance for the entire family).

But the RTE report is very clear that these numbers will vary according to personal circumstances.

It's also pretty clear that the state pension won't cover much at all past the basics. And for many people they'll struggle on it even for the basics.
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Same here, i ran some numbers for my own situation recently, which are broadly aligned to the report - comfortable retirement, and i assumed no mortgage or any other loans, and kids through college and financially independant.
 
We are a self selected group here. If you have made it to AAM, chances are you are financially aware if not savvy, and often times both. IMO anything that gets headlines that might get people thinking or talking about how to fund their later years is a good thing. We can argue the target pension income but in broader terms to make people realise that they even need to begin to think about this is a good outcome.
 
Dave Vanian said:
I'll argue this point based on very little more than my own opinions. :) 800,000 people working in Ireland who are not in any pension scheme at all. (The Auto Enrolment target market.) I'm going to speculate that we don't have too many of that group here on AAM. Average salary in Ireland is €45,000 per year according to Morgan McKinley. Being an average that means there's a huge number of people below it. (And yes I'm sure that there's plenty of overlap with the 800,000 non-pensionable folk.)

I would say that if you're earning less than €45,000 per year and paying for accommodation in some shape or form, you'd have very little disposable income after meeting the essentials. Accordingly I'd speculate that the majority of AAM regulars are on the north side of the €45,000 average line who have enough disposable income to be looking for advice on what to do with it to make good use of it.
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I agree.
If you're a single person on 45k, with no kids and paying a thousand a month in rent/mortgage then you will only have about 1.5 times the contributory pension left after all deductions.
If it's a mortgage you have then you can look forward to actually being better off in retirement with just the contributory pension. :p
 
Dave Vanian said:
I'll argue this point based on very little more than my own opinions. :) 800,000 people working in Ireland who are not in any pension scheme at all. (The Auto Enrolment target market.) I'm going to speculate that we don't have too many of that group here on AAM. Average salary in Ireland is €45,000 per year according to Morgan McKinley. Being an average that means there's a huge number of people below it. (And yes I'm sure that there's plenty of overlap with the 800,000 non-pensionable folk.)

I would say that if you're earning less than €45,000 per year and paying for accommodation in some shape or form, you'd have very little disposable income after meeting the essentials. Accordingly I'd speculate that the majority of AAM regulars are on the north side of the €45,000 average line who have enough disposable income to be looking for advice on what to do with it to make good use of it.
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Not disagreeing with you here David and would agree that a lot of money makeovers have a person earning 70 or 80k
but money makeovers that I was thinking about usually include a second person and that person is earning a lot less, somewhere in the 20 to 30K
And combined, in my opinion, puts them in the average bracket in todays terms, you might look at it differently but that's the way I see it
 
misemoi said:
We are a self selected group here. If you have made it to AAM, chances are you are financially aware if not savvy, and often times both. IMO anything that gets headlines that might get people thinking or talking about how to fund their later years is a good thing. We can argue the target pension income but in broader terms to make people realise that they even need to begin to think about this is a good outcome.
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While a start and something is better than nothing I feel there is a big gap between reading the article and understanding what you need to do to get each of those pension amounts.

Eg. A person who is 30 with no pension will need to contribute x per month to have a pension equivalent to 33k take home today (assuming x% growth and that the state pension is still on the go).
 
faketales said:
While a start and something is better than nothing I feel there is a big gap between reading the article and understanding what you need to do to get each of those pension amounts.

Eg. A person who is 30 with no pension will need to contribute x per month to have a pension equivalent to 33k take home today (assuming x% growth and that the state pension is still on the go).
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I wonder was that deliberate. They publish the report knowing that the marketing departments of every pension company and most pension brokers will be including these results in their sales pitches and perhaps doing the sums to go with the sales pitch. The original report would probably read too much like a sales pitch and less like an academic report if they included such calculations. And they know they have a whole industry only too happy to do that for them.

misemoi said:
We can argue the target pension income but in broader terms to make people realise that they even need to begin to think about this is a good outcome.
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Couldn't agree more. Anything that even plants a seed in someone's head to start thinking about real figures in their own context can only be a good thing.

We need to keep educating people that "having a pension" is not a binary thing - you do or you don't. There's a danger of complacency if someone is paying a very small amount into a pension that they may think "Oh I have a pension. That's me sorted. Box ticked." It's a start, but the next step is to look at adequacy. A report like this helps with that. (The fixed, unchangeable and low funding rates for the Auto Enrolment Scheme as it's currently proposed are a terrible idea for the same reason, in my opinion.)
 
I know 2 people in my circle... Both are mid 50s,, no pension, no health insurance.
There's no point talking to them about it .. they know better.

Live for today, you could be dead by Christmas.. that's their life philosophy.
I've given up trying to help them.
 
My parents are aged 75+, combined gross income around 52k. They pay under 10% direct income tax, and get:
  • Two medical cards
  • Two FTP
  • 35pm off elec bill = 420 pa
  • Free TV licence

They have health insurance.

As well as regular saving of 750 into one bank, my father tells me that his current account balance keeps building up and up.

They physically couldn't spend their income, so it looks to me like the reported figure of 43,200 for a couple is very fair.
 
I find these debates about what is a fair income to be impossibly subjective. Some people have holes in their pockets and some people are unreasonably thrifty. There is a thread somewhere on this site about someone who stockpiles laundry all week and spends Sunday doing multiple loads to take advantage of a cheaper electricity tariff.

Most people adapt their lifestyle to their means over time and a big drop is more of a problem than a low level per se.

I actually think it's more useful to think of replacement income in retirement. At household level mid-60s I expect us to have 60%-70% of employment income with about two years' of lump sums at point of retirement thrown in. That's okay for us.
 
Dr Strangelove said:
I find these debates about what is a fair income to be impossibly subjective. Some people have holes in their pockets and some people are unreasonably thrifty. There is a thread somewhere on this site about someone who stockpiles laundry all week and spends Sunday doing multiple loads to take advantage of a cheaper electricity tariff.
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I presume you're referencing me here and my ongoing experience of switching on our smart meter and whether the switch resulted in higher electricity bills, which seemed to be the general opinion here when these meters were been installed and the smart plans been rolled out.
Or lower bills which I found to be the case and if you think that was "unreasonably thrifty" wait until you read about last years experience where we took back our Sundays and moved to the EV smart plan and started doing our laundry and other "electric things" between the hours of 2 and 5 in the morning ;)

You are correct that these debates are very subjective to the user, what works for me might or might not work for someone else and vice versa
but the whole point of these discussions or at least for me when I give insights into my early retirement journey and how I live my life is to give real time figures and opinion to other people who are making the move from employment to retirement or just struggling to make ends meet

For reference the "Free electricity on Sunday" saved us just over €600 on that years bills compared to the standard plans, not a huge sum of money but to someone less fortunate then me it could make a big difference especially when they are struggling with the rising cost of living that we all find ourselves dealing with at the moment
 
Cervelo said:
For reference the "Free electricity on Sunday" saved us just over €600 on that years bills compared to the standard plans
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My marginal kWh is 25c. If you’re saving €50 a month with free electricity that’s consumption of 200 kWh on laundry alone per month. That’s about 50 hours of washing machine and 50 hours of tumbledrying spread over four or five Sundays.

Maybe you have eight kids or maybe you’re laundering for a rugby team. Or maybe you’re miscalculating your savings.
 
Dr Strangelove said:
My marginal kWh is 25c. If you’re saving €50 a month with free electricity that’s consumption of 200 kWh on laundry alone per month. That’s about 50 hours of washing machine and 50 hours of tumbledrying spread over four or five Sundays.

Maybe you have eight kids or maybe you’re laundering for a rugby team. Or maybe you’re miscalculating your savings.
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No it wasn't just laundry alone, on average we did four washes, we don't have a dryer so the clothes we couldn't dry on the outside washing line we used an oil filled radiator to help dry the clothes, the dishwasher went on, the house was hoovered from top to bottom
Mrs C did a lot of baking and we made sure the Sunday roast was cooked before 5pm
As you can see a lot happened on Sundays, the house was never cleaner but the downside of it all is it tied up all our Sundays and became a right pain in the backside and I was delighted when the year was up :)

If its of any help here is my thread on the subject, maybe you can run through the figures and see if I made a miscalculation in my savings
which isn't beyond the bounds of possibilities as it wouldn't be the first time ;)
My Thread
 
LDFerguson said:
I wonder was that deliberate. They publish the report knowing that the marketing departments of every pension company and most pension brokers will be including these results in their sales pitches and perhaps doing the sums to go with the sales pitch. The original report would probably read too much like a sales pitch and less like an academic report if they included such calculations. And they know they have a whole industry only too happy to do that for them.



Couldn't agree more. Anything that even plants a seed in someone's head to start thinking about real figures in their own context can only be a good thing.

We need to keep educating people that "having a pension" is not a binary thing - you do or you don't. There's a danger of complacency if someone is paying a very small amount into a pension that they may think "Oh I have a pension. That's me sorted. Box ticked." It's a start, but the next step is to look at adequacy. A report like this helps with that. (The fixed, unchangeable and low funding rates for the Auto Enrolment Scheme as it's currently proposed are a terrible idea for the same reason, in my opinion.)
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Calculating what you need in retirement (in today’s numbers) isn’t that difficult an exercise really.

They could just provide a guild to say what you spend now in a year less mortgage, childcare, college kids costs. Holidays can be off peak etc.

Those retirement living costs are basically just living costs with a few deductions.

In my opinion getting there is the tricky part. Or even knowing if you are on the right track, as you say just having a pension isn’t enough. I think in the encouragement to get people to get something the detail is lost. Which is equally as important.
 
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