What is your personal retirement target sum?

I’ve been in too many nursing homes over the years and I can truthfully say I wouldn’t want to end up in any of them…feels like you are just waiting to leave this world…in other words does it really matter which one you end up in!
 
That’s coincidentally where I have ended up in my thinking/ cash flow projections 60k net in todays money ..,obviously if you have expensive/ luxuriously taste then it would be more
 
That’s coincidentally where I have ended up in my thinking/ cash flow projections 60k net in todays money ..,obviously if you have expensive/ luxuriously taste then it would be more
60k net in todays money seems high, say you are 15 years out from retirement, wouldn’t you need to be planning to breach the SFT by a fair way on your pension fund to make that possible?
 
60k net in todays money seems high, say you are 15 years out from retirement, wouldn’t you need to be planning to breach the SFT by a fair way on your pension fund to make that possible?

Retirement income can come from multiple sources.
 
super rough but if you want 65k per year, you can take away the state pension at just under 15k right?

So 50k per annum using 4% rule is a pot of about 1.25M

If you are happy to deplete the pot by age 100 when retiring at 65, this would reduce to around 950k.

But you really need to be coming at it from expected costs of the couple together (and two state pensions?)
 
The €60k is net of tax though.
Yes I read it as net of tax single income and I read retirement target sum as amount in pension fund and also it ‘in todays money’ so it’s a net income of 80k ish after tax in 15 years? That’s some fund.
 
Yes I read it as net of tax single income and I read retirement target sum as amount in pension fund and also it ‘in todays money’ so it’s a net income of 80k ish after tax in 15 years? That’s some fund.
Well I’m talking about a couple. So €26k or thereabouts is covered with State Pensions. It’s probably closer to €100k gross I’d have thought, so €37k each, or ARFs of about €925k. A few bob alright, but not gigantic either.
 
The budget required to fund the pension wouldn't be the same throughout retirement. As in, 65 (or from retirement) to about 75 are likely peak spending, whereas after 75 (or so) surely its likely one spends less.
I wonder how many people run out of money having under planned their budget. My guess is not many, more likely that people cut their clothing according to their pot/situation.
 
That’s interesting. Thanks Steven. Does anyone ever ask for it to be included? I don’t like the idea of having to sell my home or not having a choice around where to go.
Some do, not many as the projected timeframe of going into a home is so far away (I know we don't know when it will be, if at all).

You don't have to sell your home. If you have no money, the State get 7.5% of the value up to a max of 3 years. The house is to be sold on death or the the value owed is paid from the estate. The State will pick up the tab no matter what home you go to, you can go to whichever one you want to. The one on Brighton Road in Foxrock is over €100,000 a year and the State will pay for it if you don't have any money.



Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
I’ve been in too many nursing homes over the years and I can truthfully say I wouldn’t want to end up in any of them…feels like you are just waiting to leave this world…in other words does it really matter which one you end up in!

I visit my mum in a nursing home and the above is not far from accurate. People seem to fit into 3 groups. The top two are surviving not living for the most part.

  1. Mentally checked out
  2. physically checked out
  3. Diminished in one of the above 2
For my part it is a case of not suffering now by over savings but not suffer then due to under saving.
I plan to have between pension value and investments of around €1m is my aim. Current projections is around 1.3m but i am taking that with a pinch of salt as that is based on risky investment i am in currently but will go safer in a few years
 
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60k net in todays money seems high, say you are 15 years out from retirement, wouldn’t you need to be planning to breach the SFT by a fair way on your pension fund to make that possible?
I am allowing for 2 state pensions and it’s for a couple . I am more saying that’s what income I think we need annually in today’s terms . Just my opinion . I feel it’s realistic but not extremely extravagant.
 
I’ve been in too many nursing homes over the years and I can truthfully say I wouldn’t want to end up in any of them…feels like you are just waiting to leave this world…in other words does it really matter which one you end up in!
Of course you are. You're in a home because you can't live in your home and the people in them tend to be old...and most are ready to go too!!

My aunt is currently in one and it's the best place for her. She has dementia and isn't able to look after herself. She was living a good bit away from the rest of her family, so she didn't get visitors that often. She's now in a home near us so everyone drops in to see her all the time. She's clean, her clothes are clean, she's sleeping in a bed again (was on the sofa for years, afraid to go up the stairs) and eating like a horse. A lot of the time she's not sure what's going on but she's as happy as Larry.

There is a big difference between some of them. Look at the HIQA reports and you'll see the differences.
 
I am allowing for 2 state pensions and it’s for a couple . I am more saying that’s what income I think we need annually in today’s terms . Just my opinion . I feel it’s realistic but not extremely extravagant.
What valuation do people use for the state pension in the future for these calculations? Do you assume it will rise at say 2% annually?
 
Of course you are correct Steven…the quality of homes can vary greatly and they will become far more important as family size decreases…it’s very important that one makes the most of there time in retirement to do the things that they where hoping to achieve as u never know when age catches up and it becomes to difficult…fair deal scheme can take care of your nursing home fees…there’s still that idea you should leave your home to your kids at the expense of enjoying yourself in retirement
 
What valuation do people use for the state pension in the future for these calculations? Do you assume it will rise at say 2% annually?
i just assume increases match inflation so 2 oap =26k approx now and so assume will retain their real value in real terms. i do not use any multiplier.
 
What valuation do people use for the state pension in the future for these calculations? Do you assume it will rise at say 2% annually?
There is no formal indexation in Ireland. It’s reasonable to assume it will keep up with inflation, possibly more as a bonus.

whereas after 75 (or so) surely its likely one spends less.
I looked for CSO data on this and they don’t really have spending measures by fine age group. My anecdotal experience with several relatives is that discretionary spending drops a lot after 80, even with good health. People just don’t have the urge to go out as much, often you lose your driving licence, people only really want essential house repairs, etc. I’ve had relatives accumulate six figures in bank deposits in their 80s without even trying.
 
Dr strangelove, you might find UK data by age, they have done several studies on retirement cost of living, although I haven't searched to see if it breakdown by age

https://www.retirementlivingstandards.org.uk/ - although on surface this one doesnt breakdown by age it is interesting to see the amounts they regard as "minimum" v "comfortable", also the gap between single and couple is "small" far smaller than some other posts in the thread have so far implied i.e pension pot for a couple is far less than double a single pension pot!! Indeed 43k for a single person, becomes 59k for a couple, just 40% extra required.
 
i just assume increases match inflation so 2 oap =26k approx now and so assume will retain their real value in real terms. i do not use any multiplier.
There is no formal indexation in Ireland. It’s reasonable to assume it will keep up with inflation, possibly more as a bonus.

Looking at the state pension from 1995 to 2014, it has risen from €92 to €277, so that's a CAGR of ~3.9% and that includes the period of stagnation from 2009 to 2015 where the rate stayed at €230 that's not bad at all especially considering that using CPI that €92 is worth ~€170 today.

With ECB inflation target of 2% I suppose that's as good a rate as any to use.
 
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