How much should I save for my pension? It’s a question we are often asked as financial advisors.
When you’re starting a pension, the first thing you calculate is how much money you want once you retire. And this should determine the amount of money you put into your pot every year.
However, it can be difficult to predict in advance what your needs will be in the future.
Here is how you can get a better idea of how much you need for your pension:
What is a good pension pot?
How much you put into your pension pot, depends on the kind of lifestyle you want once you retire, and on the length of your retirement.
To retire comfortably, it’s often advised to live on half of your current pre-retirement income. However, it’s often not enough, especially if you want a better lifestyle when you retire. You might have plans to travel, move, or even buy properties.
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But what you should take into consideration is that your costs of living will most likely reduce in retirement. Indeed, if your mortgage is paid off and your kids are out of your house, you will ultimately spend less money. Nevertheless, it can be different for other people.
If you bought a house at a later stage and still need to cover your mortgage payments and other bills, your pension income would need to be higher. If, for example, you haven’t bought your own home, you will still need to pay rent.
Also, any health insurance scheme you had through your employer will stop when you retire.
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If you need any help understanding your pensions contact us now. We offer a no obligation initial call.
How much should I save for my pension?
Ideally, you should save as much as possible for your retirement. But in order to fix the amount of money you put into your pension, you should ask yourself: “How much can I afford every month?”. This will allow you to fix your monthly contributions and therefore help you predict how much you’ll have once you retire.
It’s important to know that If you are relying on the Irish state pension alone, it might not be enough to sustain all your needs.
So, if you are planning on retiring in your 50s or early 60s, having a private pension is the best solution. It’s never too soon or too late to start planning your retirement.
Planning now will help you to have the lifestyle and financial stability you desire in your retirement.
How do I calculate my contributions?
One of the easiest ways to calculate your contributions is using a pension calculator.
A pension calculator can help you decide how much to contribute towards your pension. Also, you will be able to see the future value of your contributions.
How can we help?
Most people are not aware of how much they are spending every month and how much they could save.
As financial advisors, we will create a personalised financial plan for you and help you understand your finances a bit more. Also, we will help you fix your monthly contributions and find the best pension option for you.
If you don’t have any idea of how much you should be putting into your pot, don’t worry! We are here to help and make the process as easy as possible.
What we do:
- Help you set up a pension
- Review your old pension and help you change if necessary
- Check your current pension and see if they are at your best advantage
- Evaluate if you can invest more money for your retirement
- Help you turn your pension into income at retirement
