In Ireland, people prefer to retire at the age of 66 because it makes them eligible for state pension benefits. However, there are no hard and fast rules to retirement. Moreover, it is not about retirement age, but it is all about affordability. You can retire early if you have few commitments and more resources.
It is a well-established fact that pensions play a significant role in an individual’s life after retirement. The needs and budgets of every individual are different. Unless you want to avail the maximum government offered tax assumptions, you have the freedom to choose your retirement age above 50.
To help Ireland citizens make more informed decisions on early retirement planning, we have curated a list of aspects to consider. Read on to know how much you need to retire at the age of 55, 60, and 65 in Ireland.
As mentioned, you can retire at any age in Ireland. But, the decisions greatly depend on your liabilities, lifestyle choices, and overall savings. In Ireland, you are most likely to qualify for a state pension after the age of 66. Moreover, going by the trends, this figure will rise shortly.
Therefore, to retire early, you have to have sufficient equity, savings, or another source of income to fuel your retirement ambitions. Unfortunately, most citizens do not possess such resources to retire early, so they choose to delay retirement.
Eary retirement Ireland dream is possible if you plan carefully and start saving early.
The straightforward answer is Yes. The terms of regular engagement or retirement age are stipulated in every employee’s employment contract. But if you are confident about your financial situation at the age of 50, 55, or 60, you can retire with some specific pension arrangements defined for the age group of 50+.
However, it is important to note that the pension benefit increases with the length of service. Similarly, it needs a great deal of preparation to retire early in Ireland.
Average pension at ages 50, 55, and 60
According to the Central Statistics Office, the average annual income in Ireland is €41,600. Taking this as our mean figure, let us explore the average pension required to fund retirement at different ages.
On average, saving in your pension account at the age of 50 should be 5 x your current salary. So, you will require 5×€41,600 = €208 000 on an average in your pension pot at age 50.
On average, saving in your pension account at the age of 55 should be 7 x your current salary. So, you will require 6×€41,600 = €249 600 on an average in your pension pot at age 55.
On average, saving in your pension account at the age of 60 should be 8 x your current salary. So, you will require 8×€41,600 = €332 800 on an average in your pension pot at age 60.
One size fits all approach doesn’t work in the case of early retirement planning. No matter at what age you retire, you have to consider several factors to estimate your monthly expenses after retirement. In addition to the cost of living, you may have other recurring expenses such as:
- Liabilities like a personal loan or different debts
- Property tax
- Food and Transportation
- Dependent Children
- Your overall savings
Therefore, it is imperative to have a bigger picture in mind while planning an early retirement. Paired with inflation, your financial stability plays a significant role in decision-making.
The concept of early retirement is fascinating and misleading at the same time. But it is important to not rush without accessing your circumstances and financial stability. So, whatever your case may be, it is important to ask bigger questions and get a professional consultancy before making any big decision.
If planned early, you can significantly make your retirement comfortable and live a financially stable life. Otherwise, you have to face immense financial and mental troubles after retirement.