Key Post Some wealthy people are worrying unnecessarily about their finances.

elcato said:
So get rid of the car and health insurance and you have 4k for holidays a year. Also good for your blood pressure to walk rather than drive :)
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Yes there is more than one way to skin a cat ;)
I'm lucky in the fact that if I had to live on just the OAP I could very possibly make it work in one shape or form simply because if that's all there is well that's all there is to work with and some tough decisions would have to be made
I live slap bang in the middle of Blackrock, Stillorgan, Cornelscourt and Dun Laoghaire so getting rid of the car to free up some extra cash wouldn't in my eyes be to big a deal as I'd be entitled to the free travel and have plenty of different bus routes close by
But I'm not so sure at 66 if I'd be inclined to give up the health insurance for obvious reasons

As regards the blood pressure, between 2020 and 2022 my doctor spent the guts of two years tiring to get my blood pressure down to a normal range despite me been the fittest I've ever been and the lightest for a long long time and cycling close to 20,000 KM a year with a resting heart rate of sub 40bpm :D
 
Not having outstanding debt at retirement probably trumps everything else.

Thought definitely I am sure anybody who didn't get to buy a home before they hit 50 will have a lot to worry about but otherwise your point is correct - most pensioners can manage on the default state pension, and a modest pension of 10-12k would be comfortable for most people.

Now do "life cover" because that is tremendously wasteful for older people who no longer have incomes to lose or costs associated with need for childcare if they do pass on.
 
Calico said:
As other have mentioned, I think you will struggle to live a fulfilling life on the state pension (c.€1,200 p/m) even if you own your home.

You will only be able to afford the bare essentials.

You can forget owning a car or taking a holiday abroad.

You will never be able to buy anyone anything.

You will be severely limited in what social activities you can participate in.

Just one unexpected €1,000+ expense and you will be wiped out for a year.

You will be constantly anxious about money and bills.

You will be able to survive, but that's about it.
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Not so sure about that - my parents have an additional pension of about 75 euro a week on top of the state pension but if it were not for my father's accumulated debt of 9l from years of refusing to let a failed business wind up properly they'd live very nicely indeed. In fact my mother manages to save around 2k a year just out of the housekeeping he gives her. It all depends on your lifestyle. Like, using your free travel pass instead of driving in Dublin will save you around 10 euro on every trip.
 
This is an excellent thread and for many, some of the posts (especially Brendan's opening salvo) are worth copying for future use. I can't add much to what has already been written but getting back to a quotation of a former supermarket owner (Not exact quote:- The marketplace is completely different from where the customer is standing, the bank manager sees smiling staff and beautiful surroundings; the customer sees the queue). It's the same with retired people when approaching retirement who see health-club membership, foreign and Irish holidays, more quality family time, more spare time etc. The reality is less income, more family demands (especially from other families), descending life expectancy, notable fitness deficiencies each year, inflation, increasing costs etc. And how many have said "I'm a middle aged man of 65" - or similiar aged people saying "Old Age starts ten years from my next birthday."

The only advice I can offer after you hit 65 debt free is to live within your means. Enjoy life as much as you can because when you reach 70 you won't be as fit as you are now (OK! you walk 6 miles daily; but you're still heading into slower territory). If you can't see this, may God help you. Keep your income tax situation in super-up-to-date and avoid any tax surprise letters from Revenue. You might want to get rid of the 2nd car and wake up to the near fact that your next car might be 2nd or 3rd hand. Also, don't get caught up in Electric cars; they are relatively in their infancy at the moment and their future life is unknown.

If you are looking at applying for an After Life Loan, you could be taking on more worry than you think.

An old work colleague of mine had a saying:- "Get on with the job . . ." It's the same when you retire Get on with your retirement.
 
My aim over the coming years is in the following order
1. Pay down my debt (leaving mortgage aside). Should be done this year.
2. Build up emergency fund
3. Make max AVC contributions and save for a well deserved holiday. Basically funnelling what i had been paying towards loan to this purpose.
4. Start saving to overpay mortgage with aim to bring maturity date in ahead of pension age.

Once im in step 4 i will continue to focus on reducing outgoings. I have to pay off mortgage before retirement or have it very low. I'll try to keep performing home improvements over the years where possible as i definitely wont be doing as much when i retire. Technically i could go on holidays etc or spend more but if i do that now I'll be in major trouble in 10/15 years. I need to live within current means and keep an eye on future means. I have some trauma with having to use every penny of my savings and more during divorce so my view is a bit skewed but no way do i want that extreme financial stress. My pension is not where it should be (approx 100k) but a year from now ill be contributing myself on top of a generous employer contribution.
 
This is a topic very much on my mind recently and maybe I am worrying more than I should be as well.

Maybe a silly questiin, but is there a guide on how to figure out what your private pension income will be.

For simplicity, say I have a pension value of 100k.
I retire at 60.
I take 25% tax free, leaving 75k in the pot.
How is the annual pension amount thereafter determined?
Nobody knows how long I will live, so how do they decide what the annual amount will be?
Is there a rough guideline that the pension companies use?
 
AndroidMan said:
This is a topic very much on my mind recently and maybe I am worrying more than I should be as well.

Maybe a silly questiin, but is there a guide on how to figure out what your private pension income will be.

For simplicity, say I have a pension value of 100k.
I retire at 60.
I take 25% tax free, leaving 75k in the pot.
How is the annual pension amount thereafter determined?
Nobody knows how long I will live, so how do they decide what the annual amount will be?
Is there a rough guideline that the pension companies use?
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As far as I know, you draw it down as you see fit. You can draw down in lots of any amounts, or fewer large amounts. When it's gone, it's gone.
 
Some further research on retirement living standards that might be relevant to this thread -

Retirement Living Standards - Research

I see the Pensions Council are to develop a set of retirement standards for Ireland, broken into minimum, moderate and comfortable levels for individuals and couples - https://pensionscouncil.ie/news/november-2023-project-to-develop-a-set-of-retirement-living-standards/ In the UK, the Pensions...
www.askaboutmoney.com
 
Absolutely excellent thread, especially first page.

DublinHead54 makes a valid point which is one of larger variables that people do not always appreciate. I am also a high earner, but the job is arguably unsustainable, and even if I do climb the ladder and make very good money, it could be over in 6 months. The reality is most of us in great paying jobs wont end up with no income at all, but it is hard to know where income could fall to, and for how long their may be a gap with nothing.

That brings me back to Brendans post though, you can not be in a good job and fretting and stressing over the rainy day. I am certainly guilty of that, over thinking many bigger purchases (and maybe saving a few euro by doing so, but also consuming far too much time and mental capacity, that could be spent enjoying life a bit more).

Not sure what the solution is to that conundrum but I certainly find myself in the space that an observer at a distance would suggest is unnecessary. I think this is ultimately why many people try to pain down their mortgage quickly too, it is often a reduction in a perception of risk exercise not a smart financial move, in times with interest rates below ~3% paying into pensions or a fund will be more lucrative and liquid

P.s not sure Brendan was saying that living on state pension is perfectly fine, I think he was suggesting it is ok, but IF you own a home you can utilise the home for cash - there is too many people trying to leave a home to their kids as inheritance, which in many cases is absolutely not necessary but comes at a huge cost to those trying to achieve it. It is nice to leave some inheritance to offspring, but not necessary, and certainly not a smart priority if kids are doing fine for themselves.
 
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