Calculating pension fund

M

marioX

Guest
I am in the process of setting up a pension through my employer and am trying to do some rough calculations about the size of fund to expect at retirement. Here are the figures i have come up with.

The blurb from the scheme provider states that if you put €100 per month into a pension scheme from age 30 (my age) to 65 you will have a fund of €131000 assuming an annual return of 6%.
I will be investing €350 per month (7.5%) of salary which will be matched by my employer to give a total investment of €700 per month.

If for arguments sake I was to fix this figure at €700 for the 35 years it would give me a pension fund of 7*131000 = 917000

My 2007 salary is €56000 so my pension fund would equate to approx 16.4 times my 2007 salary.

I intend to keep my payments linked to 7.5% of my salary, so am I right in saying that if I keep paying 7.5% of my salary into the scheme I will wind up with a fund of 16.4 times my 2042 salary?

Thanks in advance

MarioX
 
marioX said:
The blurb from the scheme provider states that if you put €100 per month into a pension scheme from age 30 (my age) to 65 you will have a fund of €131000 assuming an annual return of 6%.
Click to expand...
Bear in mind that the return of 6% is just illustrative and in no way reflects what may/will happen in the future in actual fact.

For what it's worth there are some pension calculators in this list:

A Compilation Of Useful Links

What charges apply and what funds are available in your employer's scheme are also key issues to be considered.
 
marioX said:
If for arguments sake I was to fix this figure at €700 for the 35 years it would give me a pension fund of 7*131000 = 917000

My 2007 salary is €56000 so my pension fund would equate to approx 16.4 times my 2007 salary.
Click to expand...

I think you need to compare your current salary with what the estimated fund value is in today's terms (rather than what it will be in 30 years)

If you roll back by 6% per annum say, then the value of your fund in todays terms is €159,659 (I think!!), which is 2.85 times your current salary
 
Yeah the danger in doing pension calculations seems to be that it is pointless coming up with actual monetary values for my fund as in 2042 €1000000 will probably not buy me a decent car! Thats why I wanted to do some calcs to try and link my % of salary input over 35 years with a pension fund calculated as a multiple of my final working years salary.
 
I think you need a fund of approx 10 times current income to provide a pension of 2/3 income at 65. To achieve this you need to contribute approx the max allowed by revenue for each age group.

To to 30 ...... 15%
30 to 40 .......20%
40 to 50 .......25%
50 to 55 .......30%
55 to 60........35%
over 60 ........40%
 
Thanks, that gives me some general percentages to work towards.
 
marioX said:
The blurb from the scheme provider states that if you put €100 per month into a pension scheme from age 30 (my age) to 65 you will have a fund of €131000 assuming an annual return of 6%.
Click to expand...

Is that €100 level, or increasing at a certain %?
 
boaber said:
I think you need to compare your current salary with what the estimated fund value is in today's terms (rather than what it will be in 30 years)

If you roll back by 6% per annum say, then the value of your fund in todays terms is €159,659 (I think!!), which is 2.85 times your current salary
Click to expand...

The usual route would be to roll your salary forward at 4% per annum to retirement date and then compare that expected salary with the expected pension fund that you have been quoted.

A projected fund of ten times projected salary would be a good target...not easy to get to though!
 
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