Projected Retirement benefits question

M

Minimany

Registered User
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Hi folks. I was originally given a projected benefit for retirement at age 60 (I've just turned 60) of €26,500 per year for a pension pot of €1,029,000 by my fund manager. My employer now says I can work until 65 and I have been given a new projected benefit of €36,950 for a projected pot of €1,109,450. I don't understand why my pension would jump up by €10,000 p.a. for such a small increase in contributions over the 5 years. Can anyone throw some light on this? Thanks for reading.
 
It’s just the simple maths of it.

You’re drawing-down from a slightly larger sum, yes, but it’s over a shorter period of time (i.e. five years less).

Say you’re expected to live until age 85.

It’s now 20 years from age 65 versus 25 years from age 60.
 
Thanks for that. So it depends on how many years the fund manager expects me to live e.g. they expect to only fund me for 20 years instead of 25? How many years would be the usual life expectancy would you know?
 
Minimany said:
Thanks for that. So it depends on how many years the fund manager expects me to live e.g. they expect to only fund me for 20 years instead of 25? How many years would be the usual life expectancy would you know?
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I don’t know, sorry.

Presumably the CSO or Google can tell you that?
 
Minimany said:
Thanks for that. So it depends on how many years the fund manager expects me to live e.g. they expect to only fund me for 20 years instead of 25? How many years would be the usual life expectancy would you know?
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The average life expectancy for a male retiring at 65 is now almost 20 years. It's about 23 years for women.
 
The projected pensions look like annuities that rise in line with inflation, subject to an annual cap.

It might be worth having a consultation with a fee based pension adviser to discuss your options on retirement.

Annuity rates are on the floor at the moment and you might be better off going down the ARF route. That decision might impact the appropriate asset allocation of your pension pot so it’s worth thinking about your approach at this stage.
 
Sarenco said:
Annuity rates are on the floor at the moment and you might be better off going down the ARF route. That decision might impact the appropriate asset allocation of your pension pot so it’s worth thinking about your approach at this stage.
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I tend to agree. You have a pretty big pension pot so you can afford to take a bit more risk by staying in equities and hopefully take advantage of higher expected returns over your retirement.

You will presumably get the state pension down the line and have a mortgage paid off too so the basics are covered.
 
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