Make your retirement income last as long as you do….

Will your retirement years be free of financial worries, or will you struggle to have the lifestyle you’d like?

How much is ‘enough' to retire on – and how can you ensure your ‘pension pot’ will ‘see you out’?

Consider this… you’ve just retired, picked up your last paycheque, when suddenly the realisation hits you - the pension you've been automatically paying into and other savings have to finance your entire retirement, your travel plans, a new car, oh – and you need to leave something for emergencies… you know, just in case.

What if the money runs out too soon?

How can you tell if it’s enough to do the things you’ve been looking forward to, as well as buying the groceries and paying the bills?

It’s hardly surprising many retirees, faced with exactly this situation, confess to being more than a little anxious about their financial security.

?So how much is enough?

It doesn’t have to be like that. While it’s not easy to work out how much you’ll need to live on for the rest of your life, you’ll probably need about 60 – 80% of the annual income you earned before retirement, to maintain the same standard of living. This includes the state pension, so if this is €12,912 per year you need to work out what additional income you’ll need to sustain you for another 20, 30+ years, post-retirement.

?When determining how much you will need, consider the following:

?· your (and your spouse’s) probable lifespan (what if you need additional care)

?·?your current pension contributions/savings rate?

?·?the rate of investment return you can reasonably achieve; without too much risk involved?

?· the rate of inflation – for example, look at the rising cost of energy at the moment?

?·?the type of lifestyle you’d like to maintain

?·?the amount of tax you have to pay – lower or higher rate?

?·?other sources of income – do you have Rental Income?

Making your money last longer

If your calculations show you may not be able to finance the lifestyle you’d like, and if continuing in full-time employment isn’t an option, you’ll need to make your money last longer. Here are some suggestions ...

Spend less – re-examine your expenditure and look for ways to trim the budget

Pay less tax – your financial planner or accountant can help you arrange your affairs as tax effectively as possible, and make sure you’re claiming all possible deductions.

Establish whether you have any right to Social Welfare entitlements

Achieve better investment returns – review your pension and monitor your investments (in conjunction with your financial planner) to ‘fine tune’ your portfolio and produce better returns without sacrificing security

Supplement your income with part-time work – a few hours’ work each week could make a substantial difference to your budget and may not even affect your pension.

If you’ve just retired, or you’re approaching retirement, one of the best decisions you can make is to discuss your plans with a qualified financial adviser, who can help you make sure your retirement dreams become reality. With the right advice, you can become more aware of the importance of creating a secure financial future for yourself.

Many people have said they intend to rely on the state pension when they retire however with the proportion of those older than 65 is set to triple by 2041 with major implications for pension funds and the healthcare system add to that greater pressure on the government purse strings and things are not looking so good for anyone retiring in 20 years’ time with no provisions made for retirement.

While longevity should be celebrated, it will undoubtedly put more pressure on a social care system that is already struggling due to chronic under-funding. We all need to take responsibility for our own retirement and while we might like to continue working beyond 65,67, 68… as we age this may not be possible and so having the financial freedom to choose will be liberating.

Check out our Free Retire With More guide for more information on how to maximise your opportunities and make smart money and retirement choices that will help boost the resources you have available to you. We want you to have the retirement you deserve, the confidence to spend what you've accumulated and not leave too much (if any) behind for Revenue.

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