I’m in my 50s & I don’t have a pension

Don’t delay any longer

You’re in your 50s and you don’t have a pension in place yet.  Obviously, it’s not ideal.  But you could still have 10-15 years, or possibly more, where you can start saving seriously for retirement.

Now is the time to start and maximise your savings so you can have a more comfortable retirement.

Could you live on the state pension of €13,172 per year?

The state pension is currently €253.30 per week (or a tenner extra if you are over 80) – which is considerably less than the minimum wage.  Could you live on that income? More importantly, could you live comfortably on it?

Think about your living costs. While your mortgage may be paid off when you retire, you still need to pay for heating, electricity, food, and having a life, not to mention costs that are likely to increase as you get older such as medical expenses.

We also need to ask, what will the state pension be in the future? We have an aging population in Ireland, so will the state be able to afford to maintain the state pension at a reasonable level when the number of retired people increases compared to the working population who pay tax to pay to fund their pensions?

The state pension age is increasing

Traditionally, people retired and received their state pension at 65.

However, in 2014 the government changed the rules to increase the retirement age.  If you were born after 1961, your state pension age is now 68. If you are in your 50s and born before 1961, your state pension starts at 67.

There is no guarantee that the retirement age won’t be pushed back even further.

Life expectancy is increasing

Due to advances in medicine and healthier living, people in Ireland are living longer.  Life expectancy for men is currently 80 and for women it’s 83.  It’s possible that you could live for 20-25 in retirement (or even longer).  While that’s great news, it means that we need to save more money while we’re working to provide a decent standard of living when we retire.

Benefits of a pension

The Government want you to save for retirement so they provide big tax incentives for pensions.  Pensions qualify for favourable tax treatment in 3 ways:

1. Your contributions receive tax relief at your marginal rate. If you are a higher income tax payer, you’ll receive 40% tax relief on each contribution – so every €100 that is paid into your pension, only costs you €60. Lower rate income tax payers receive relief at 20%.
2. Your pension fund grows tax free.
3. You can claim a tax free lump sum on retirement of up to 25% of your savings.

Maximise your income tax relief

• If you are aged 50-54 you can save up to 30% of your income in a pension and receive tax relief
• If you are aged 55-59 you can save up to 35% of your income in a pension and receive tax relief

(subject to an earnings cap of €115,000). So the good news is that while you’re starting late, you can make larger contributions than someone in their 30s or 40s.

How do I start a pension?

1. Have a chat with an Irish Pensions advisor – call (01)8570655, fill in the form below to arrange a call, or start a conversation using our Online Chat (click the icon on the bottom right of the screen).
2. The advisor will ask you a series of questions to identify your target income in retirement
3. They will complete a ‘risk profile’ with you to make sure your pension is invested in the right way depending on your attitude to risk
4. They will compare pension providers and fund managers to find the most suitable pension

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