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How to calculate how much pension I need

  • 22-11-2021 04:41PM
    #1
    D3V!L
    Registered Users, Registered Users 2 Posts: 2,715 ✭✭✭


    I'm a little late to the pension game at the age of 42 due to other work and commitments. Any pension calculator I'm looking at is telling me that I should aim for 50% of my salary at retirement. How would I know what my retirement salary is !!

    What's the general consensus?



Comments

  • #2
    sonyvision
    Registered Users, Registered Users 2 Posts: 617 ✭✭✭sonyvision


    How long is a piece of string, I put away 20% of my salary and if by the time I retire I draw down 40k in today's money without any kids or mortgage I could survive on that very easy. Put in your max amount your allowed for tax relief would be a good starting point.



  • #3
    [Deleted User]
    Posts: 11,195 ✭✭✭✭ [Deleted User]


    Theres no magic formula, the idea being that by the time you retire you might be at a stage where your major outgoings have dwindled somewhat.

    Half-final-salary is shorthand for that, essentially.

    What would you imagine your final couple of years salary will look like? Pick a figure and go from there, its only a rule of thumb anyway



  • #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 18,197 Mod ✭✭✭✭Henry Ford III


    Take your current salary and index it at an assumed rate of inflation.

    Not very scientific but it's as good as you'll get.



  • #5
    homewardbound11
    Registered Users, Registered Users 2 Posts: 1,025 ✭✭✭homewardbound11


    I think the figure roughly to aim for is 600-800k pot and with that it should get you a pension of 32k a year and add if there is one a contributory pension from the government of 12k and your. E in a good way .



  • #6
    Still Clueless
    Registered Users, Registered Users 2 Posts: 15 ✭Still Clueless


    I was looking at this about a month ago and came across an article which is UK based but highlighted some of the factors to consider which I thought was a good starting point.

    https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

    Lots of variables will impact your needs - what type of retiree you will be, rent/mortgage status, how many people do you need your pension to cover, do you want to maximise your tax relief, what can you afford to put into a pension etc.



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