Was there any announcement about the €2m pension cap being increased?

Flybytheseat said:
No mention in the bill of raising the salary cap for employee contributions from €115K that I can see. Will be difficult for most to reach €2.8M given the salary cap.
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I would hope at some point that changes. The SFT was higher before the bust and so was the salary cap....
 
It’ll be hard for any PAYE worker with reasonably standard terms and conditions to get to €2.8m index linked. Even highly paid people tend to be subject to a cap on the employer pension contribution (e.g. 10% of salary, subject to a maximum salary of €X).
 
Obviously there are a lot of variables to get there but is there any example of what say a €2m would look like from a career earrings and contributions with average growth would look like. Or someone want to share? I’m talking paye.
 
faketales said:
Obviously there are a lot of variables to get there but is there any example of what say a €2m would look like from a career earrings and contributions with average growth would look like. Or someone want to share? I’m talking paye.
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Not sure what you mean but if I put into compound interest calculator 3300e a month at 8% growth for 15 years on a starting fund of 277k this gets me to 2.4m in 15 years. Also presumes 5% contribution growth from salary increases and TF contribution limit increases. I'm 45 earning around 120 PA.
 
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Ya thats what i was asking. That seems like a big contribution even on that salary.

Obviously the 15 years is short.
 
Company pays 8% and I contribute 25% so it should be ok there or thereabouts.

I was building up to the 25% over a few years and eventually got used to living without it.
 
Fibbernacci said:
Company pays 8% and I contribute 25% so it should be ok there or thereabouts.

I was building up to the 25% over a few years and eventually got used to living without it.
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I put away about half that and won’t get anywhere near 1m according to AON. Been at it 7 years and have 25 more to go.

The power of compounding I guess?
 
It’s a hell of a long way to €2.8m plus indexation for any employee. If equities deliver good returns over the next 20/30 years and someone is putting in the max with a sizeable employer contribution, they might, but it’s difficult to see it being achievable for most.
 
faketales said:
I put away about half that and won’t get anywhere near 1m according to AON. Been at it 7 years and have 25 more to go.

The power of compounding I guess?
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AON will be assuming far less than an 8% return after fees. They’ll also be showing you an amount in today’s money (I.e. discounting it back at 2/2.5%).

Can be built in excel in a few minutes. The difference between an 8% or a 2-4% return over 25 years is astronomical.
 
Fibbernacci said:
Company pays 8% and I contribute 25% so it should be ok there or thereabouts.

I was building up to the 25% over a few years and eventually got used to living without it.
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Use the one at calculatorsite..com

Put in your current fund, presume 8% for equities only and whatever you think for contribution increases.

I have a fair belief my wage will increase a bit further and for the latter ten years of my fifteen year plan I'll be upping contributions to 30% for 5 years and then 35% from age 55. On that basis I'm making a fair estimate of 5% per annum contribution increases.

My hope is when my pot gets to 1.5m there is a freak positive year with high returns and I can go early.
 
faketales said:
Obviously there are a lot of variables to get there but is there any example of what say a €2m would look like from a career earrings and contributions with average growth would look like. Or someone want to share? I’m talking paye.
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My pension is currently projecting 2.7million at 65 with standard enough (if relatively higher 5-10% of earners) paye jobs since 22 or so, and only ever putting in 5% AVCs until recently enough, with one 4 year gap. Currently retiring at 60 is projecting 1.8million, but those std projections are conservative. I expect 60 to pass the 2 million also

The 2 million limit was too low imo, but I agree with the above 2.8 with indexing will be very hard to hit for normal workers. The main thing for me and I presume a good 10% of paye workers was 2 million was much too low and had people questioning whether to keep investing in their pension
 

Much too low to live comfortably off?

i agree with the need for indexing in general but surly the tax breaks for a pension are ther to encourage people to save for a reasonable standard of living for retirement. Does €2m not provide that? What would it be a year?
 
It really depends on the lifestyle prior to retirement but if you ask me, 2m is loads of money unless you're a major spender. We're talking about a lump sum of 440k after tax and then initial drawdown of 60k in year one. You can have a lovely time with that once the mortgage is paid off etc
 
It’s a decent number, but €60k a year gross is hardly living the high life.
 
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