It is difficult to give an exact figure, but how much do I need to retire in Ireland is something we are often asked by our clients.

Ideally, as we enter retirement we’ll have the opportunity to tick off some bucket list items and enjoy the lifestyle we desire. However, this is often not the reality as many of us underestimate how much we will need.

How much is needed to retire in Ireland

How much do I need to retire in Ireland?

A good rule of thumb of what to aim for at retirement is approximately 50% of your gross pre-retirement income. If you earn €70,000 per annum on the day you retire, €35,000 would be an appropriate number to aim for.

If we assume you will receive the full State Pension of €12,900 per annum, that would leave a shortfall of €22,100.

Many people aim to meet this shortfall by contributing to a pension throughout their working life. However, even if you contribute to a pension, it can sometimes be difficult to know how long your pension will last in retirement.


The retirement planning process

As we live longer, healthier lives, planning for retirement is more critical than ever.

Having a process to follow will help avoid any potential shortfalls in retirement. Although there is no one-size-fits-all approach, using the below as a guideline can be beneficial.

  1. Set your retirement goals – We likely all have a different idea of the perfect retirement. Therefore, outlining your needs and wants is vital when considering how much you may need in retirement.
  2. Assessing your current financial situation – After outlining your goals it is time to take stock of your current situation. Assess your current spending habits along with how they may change in retirement.
  3. Identify any retirement income sources – This may include a pension, rental property, or any savings and investments.
  4. Managing your retirement income – Any income during retirement will have to be managed. This is particularly important if there is no additional or ongoing income.
  5. Regular reviews – The final step is to meet with your financial advisor regularly. Having an annual review will allow you to spot any potential future shortfalls and ensure you have the retirement lifestyle you would like.

Using the above as a roadmap will allow you to begin appropriately planning your retirement.

What is the average we would like to retire on in Ireland?

As we mentioned above, 50% of your gross pre-retirement salary is a good starting point. If we assumed we retired at 66, that would give us our €22,100 over 19 years equating to €353,600 total.

PSL Survey - How much will I need at retirement

During our survey earlier this year, we found respondents wanted to have an average of €433,000 in their pension pot at retirement. Therefore, our figure of €353,600 is quite conservative.

Although, the aim of this blog is not to deep dive into pensions, it is likely the only way the majority of us would get close to having this amount in retirement.

A combination of tax relief and tax-free growth makes a pension the ideal vehicle to help you save for retirement.

However, pensions are not the answer to all our questions. Worryingly, take upon pensions is still quite low in general.

With auto-enrolment still a number of years away, this may be slow to change. Although most of us agree pensions are a good idea, the overall take-up rate is approximately 60%.

This means 40% of our population are planning to retire and live off the state pension of €248 per week. 

As inflation increases and we live longer, healthier lives than ever before, it is a worry for the government that a large chunk of the population intends to live on €35 per day.

That is without us going into the state pensions liabilities and the fact Ireland has an aging population. All the above factors will play a role in how much you will need to retire.

It is likely that inflation will continue to drive the price of goods and services. If so, this is also something that you will need to consider.

Where will your retirement income come from?

Most of us hope to have a significant amount of money saved by the time we retire. However, unfortunately this is not the reality for many particularly those without a pension.

Although, even those who take advantage of contributing to a pension and its tax benefits underestimate the amount they will need.

The average pension in Ireland  is approximately €90,000. This leaves a sizeable gap to the €433,000 our respondents said they would like.

Average Pension in Ireland Gap

Therefore, many people across Ireland significantly underestimate how much they will need to retire.

Income in retirement

Generally, most people do not generate income in retirement. Some may be lucky enough to have a property providing rental income but this is quite rare.

Most live solely off the state pension and if lucky enough, a private pension along with any savings they may have accumulated.

However, planning to rely on the state pension can be a risky business. It is currently a modest €35 a day and shows no signs of increasing. It is worth noting that although you have retired your bills might have not.

Even basic outgoings such a mobile phone and some groceries will add up quickly. It is for this reason having a long-term plan in place is so important.

Speaking with an advisor as early as possible and planning for the future you would like.

How much would I need to retire at age 55?

Retiring at age 55 is probably only a dream scenario for most people. Although, maybe some of you have squirrelled enough away over the years and this is a reality.

It is worth noting we’ll use some generalizations when calculating these figures and will also ignore inflation as well as potential growth in order to keep things simple. But these are elements you’ll need to consider to get an exact calculation.

Average Life Expectancy 82
Average Wage (per annum) €44,183.88
Age at Retirement 55


We’ll also use the fact the average life expectancy in Ireland is currently 82 years old. According to the CSO , the average wage for Q2 2021 was €44,183.88.

We would ideally like 50% of our gross salary per annum. Using the CSO figures about that would be €22,091.94.

We have used the average life expectancy figures to estimate that you would need €22,091.94 for approximately 27 years to retire at 55.

How much will I need to retire at 55

However, the state pension will also provide some assistance. For example, let us say you receive the full €12,900 state pension per annum from age 66. We’ll use age 66 as is the age from when the state pension eligibility currently begins.

It was intended that the age be raised to 67. However, the government then reversed this decision but it will likely come into effect in the near future.

That would mean even after receiving your €12,900 state pension you will still be short of €9,191.94 to get to that magical number. You’ll also spend the initial 11 years between age 55 and 66 having no state pension meaning you will have the full deficit of €22,091.94.

projected shortfall for retiring early

Retiring at age 55 is likely unrealistic for many of us but it is helpful to break the figures down for those lucky enough to have the opportunity.

To recap, retiring at age 55 will take quite a lot of capital. Again, we haven’t taken into account any potential rental properties or other potential factors.

Amount needed per year Amount of years Total
€22,091.94 27 €596,482.38
State Pension (from age 66 – 16 years total)
  • €206,400
Total Capital Needed €390,082.38

How much would I need to retire at age 60?

Having the ability to retire at age 60 is still quite young but a little more realistic for most. With the extra couple of years, the amount you will need to retire will also be substantially lower than at age 55.

For simplicity, we’ll use the same figures as above and change only the retirement age.

Average Life Expectancy 82
Average Wage (per annum) €44,183.88
Age at Retirement 60

Taking the average life expectancy into account, you’ll have approximately 22 years to enjoy your retirement.

So, how much will you need to retire at age 60? Let us break down the figures below.

Amount needed per year Amount of years Total
€22,091.94 22 €486,022.68
State Pension (from age 66 – 15 years total)
  • €206,400
Total Capital Needed €292,522.68

As we see from our calculations above, the difference between retiring at age 55 and 60 and the capital needed is substantial.

Retiring five years earlier means you’ll need an additional €110,459.70.

How much would I need to retire at age 65?

Retiring at age 65 or close to it is probably the most realistic option for most reading this blog.

The state pension entitlement currently starts at age 66. It consists of contributory and non-contributory.

The non-contributory element is means-tested. However, for simplicity, we have been assuming you will be entitled to the full benefits.

Keeping in line with the statistics and figures we used earlier, let us calculate how much you need to retire at age 65.

In this case, you will only have to wait one year until your state pension kicks in.

Average Life Expectancy 82
Average Wage (per annum) €44,183.88
Age at Retirement 65


Again, using the average life expectancy figures, you’ll have at least 17 years of retirement to embrace. Although ticking off those bucket list items will likely require a decent chunk of cash.

Amount needed per year Amount of years Total
€22,091.94 17 €375,574.94
State Pension (from age 66 – 15 years total)
  • €206,400
Total Capital Needed €169,170.94


As we saw in the example earlier, retiring an additional five years later reduces the amount required by €123,351.74.

Although early retirement may seem an attractive option, there are several factors at play.

When considering how much you will need in retirement there are several other considerations:

  • How much do you currently spend each month?
  • Do you have any long-term loans or debts?
  • WIll your lifestyle change dramatically on retirement?
  • Do you intend to travel more?
  • Do you plan on helping out children or grandchildren with mortgages etc?

Our calculations earlier rely on the assumption that 50% of your final salary would be enough. However, each situation is unique and the answers to the above questions will play a huge role.

If you are unsure, booking a full financial review would be beneficial to spot any potential gaps.

Why is it risky to rely on State Pension?

Apart from it being a limited €248 per week, there are other reasons that make relying on the state pension a risky move.

It is also a system that currently has liabilities of €359 billion. Yes, billion!

Irish State Pension Liabilities

That is a huge liability that will only see the pressure increase in the coming years. To put it into context, €360 billion would buy you 600 of these super-yachts.

One would probably be more than enough but hopefully, it provides some perspective. Ireland’s aging population and lack of full buy-in to pensions will continue to burden an already stressed system.

Is everyone entitled to the State Pension?

We will all be eligible for some form of the state pension. Whether it be contributory or non-contributory will depend on some variables.

Irish state pension options

Some requirements for eligibility are:

  • Must be over 66 years of age and have enough PRSI contributions.
  • Must have paid PRSI contributions before a certain age.

Currently, the maximum you will be entitled to is €248.30 a week or approximately €35 per day.

We have written an in-depth blog explaining the state pension in more detail should you need further clarity.

What else should you consider?

It is worth noting again that how much you need to retire will be specific to your individual circumstances.

Whether you are retiring at age 55,60,65, will be dependent on your lifestyle and spending habits.

Some people may be happy to live on a shoestring budget while others want to travel and enjoy a particular lifestyle.

Any pensions, savings, or investments will all play an important role. There are other significant and sometimes hidden factors that will impact how much you may need to retire.

Below we analyse them in further detail.


As inflation rates continue to increase, they will play a significant role in those looking to plan for retirement. Inflation can be a silent killer in some cases, particularly over a long period of time.

In 2022, we have seen dramatic increases in inflation rates. This is expected to continue to rise meaning the future value of your money may be worth less.

For example, if you had €5,000 in January 1995, by July 2021 that would have needed to have grown to €7,938.60 to keep in line with inflation.

inflation example

As of June 2022, inflation rates are skyrocketing. Although, they will likely plateau eventually, planning is more important than ever.

This increase has been highlighted by the Consumer Price Index (CPI).

Month % Annual Increase
January 2022 5.0%
February 2022 5.6%
March 2022 6.7%
April 7.0%
May 7.8%

Inflation rates rising means the purchasing power of your money reduces. €1 today will be worth a lot less in 20 years. Therefore, it is important to factor this into any calculations.

It is encouraged to over-estimate inflation rates as you calculate what may be needed to enjoy retirement.

Life Expectancy

As we live longer, healthier lives, this must be factored into how much you may need to retire. The longer you live, the more years you will need to be able to fund financially.

Improvements in healthcare, nutrition, and overall awareness around health have contributed to life expectancy numbers increasing.

Ireland specifically is also an outlier and has a higher-than-average life expectancy when compared to other EU countries.

Life expectancy has risen by 2 years for women and 2.5 years for men in Ireland since 2008.

Over the past 50 years, life expectancy in Ireland has dramatically increased.

Year you were born Life expectancy
1970 70.8
2020 82


The above highlights the difference in life expectancy in recent years.

This not only means you will need more money in retirement, but it also puts pressure on the State pension system.

The 4% Rule

The 4% rule is a common rule of thumb in some areas of financial planning. The thought process behind it is that it will help you avoid running out of money.

To achieve this, it is recommended that you withdraw a maximum of 4% of your savings per year.

In most cases, your money will be in a pension arrangement.

It is worth noting that using rules such as this can cause issues as they ignore many external factors.

Who can use the 4% rule?

The 4% rule assumes your investment portfolio is a combination of stocks and bonds. It also assumes you will keep your spending habits level throughout retirement.

However, bond rates and other aspects must be closely monitored if it is a rule you are considering.

How long will the 4% rule last?

Using this rule, it is estimated you can safely withdraw 4% of your savings for up to 30 years. However, it does ignore potential external factors such as medical expenses and market fluctuations.

Therefore, it should not be treated as an exact science or failsafe.

When may the 4% rule be the wrong choice?

If you want to be certain that your fund will not run dry, this may not be the best strategy.

A dramatic change in market conditions will likely significantly impact your fund. You would be better served to speak with an advisor and decide on an alternative approach.

What are the advantages and disadvantages of the 4% rule?

As with any rule or assumption, there are both advantages and disadvantages.


  • A simple and easy rule to follow.
  • Predictable steady income.


  • Cannot adjust to lifestyle changes.
  • Does not respond to market conditions.
  • Outdated and may not guarantee your pot does not run dry.

Retiring abroad

Potentially retiring abroad is an attractive option to many. As an EU citizen, you can live in any other EU state. This borderless approach makes retiring abroad more realistic for many people.

Although most prefer to spend the winter months abroad in a slightly warmer climate. Therefore, you would still be considered an Irish citizen and treated so for tax purposes.

Your pension is determined for tax reasons by your country of residence. Therefore, choosing what country to live in and the amount of time spent there is important. If retiring abroad is something that appeals to you, ensure you seek advice before making a decision.

How much will you need to retire abroad?

The amount needed to retire abroad will vary depending on the cost of living associated with that country. Many people choose to spend time in countries where the cost of living is lower than in Ireland.

Below we compare the cost of living in different European countries.

Country Cost of Living Index
Denmark 84.12
Ireland 76.05
Malta 67.84
Spain 53.88
Portugal 47.94

The cost of living index is calculated by taking into account the cost of rent, groceries, restaurants, and other factors. By doing this we can calculate the overall cost of living in a particular country.

Do I have to pay tax in Ireland if retiring abroad?

EU states and the United States have a double taxation agreement with Ireland meaning you will only be taxed once.

If you are considering moving to a country where this agreement is not in place, it is important to be aware of potential tax implications.

In this circumstance, it may be worth speaking with an advisor.

There are other nuances regarding residents and non-residents. Revenue provides a detailed breakdown of each.

Advantages of retiring abroad?

Retiring abroad comes with many benefits. These include:

  • New experiences – aging healthily has been directly linked to having new experiences and the physical and cognitive benefits they provide.
  • Lower cost of living – we have seen from our cost-of-living index that Ireland is one of the most expensive countries to live in.
  • The weather – a warm-weather climate provides many physical and mental benefits.

The above are just some of the benefits associated with retiring abroad.

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how much do i need to retire in ireland

What are the next steps?

Whether you are considering early retirement or trying to figure out how much you need ro retire, a chat with someone experienced in similar dealing is never a bad idea.

Our advisors have vast experience in all areas of retirement planning and would be happy to assist.

Should you choose to contact us or not, hopefully, this blog has provided you with clarity. Retirement planning is often a complex area with many aspects needing to be considered.

Therefore, it is important to take your time and assess all potential options.

We also have a guide to retirement planning which you may find useful. If anything is still unclear, feel free to contact our team. We would be happy to help.

Thanks for reading!

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*This blog should be used for information only and not taken as financial advice.

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