Early Retirement in Ireland: How Much is Enough?

Early Retirement in Ireland: How Much is Enough?


Dreaming of sipping Guinness on a beach while your former colleagues battle rush hour? Early retirement in Ireland can be a reality, but it takes planning. The biggest question? How much do you need in your pension pot?


There’s no one-size-fits-all answer, but this post will guide you through the key factors to consider:


1. Desired Lifestyle: Fancy golfing trips or a cozy cottage by the sea? A luxurious early retirement requires a larger nest egg than a more modest lifestyle. Be honest with yourself about your post-work dreams.


2. Age is a Factor: Retiring at 50 is very different than at 60. The earlier you retire, the longer your pension needs to stretch. This means you’ll need a larger pot to generate income over a longer period.


3. The State Pension: Ireland’s state pension provides a safety net, but it currently kicks in at age 66. Retiring early means you’ll need to bridge the gap until then.



How much money do you need to retire early in Ireland?


A common rule of thumb is to aim for around 75% of your pre-retirement income when you retire. Let’s say you currently earn €70,000 annually. In this scenario, you’d target a retirement income of €52,500 per year.


However, this will depend on your chosen retirement age, your lifestyle and spending habits in retirement, and your retirement goals. For an accurate calculation, a Financial Advisor can help you project how much you will need saved by retirement, while taking into account your personal situation and pensions.

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How much should you have in your pension pot?


Pension legislation dictates that from the year you turn 61, you can start annual distributions (withdraws) from your pension at a minimum 4% for Approved Retirement Fund (ARF) holders aged between 61 and 70, with a pension value below €2 million. A 4% withdrawal from your pension pot each year is a safe percentage that helps to protect you from depleting your pension too quickly.


Using the example above:


To generate a yearly income of €52,500, you’d need a pension pot of €52,500 / 0.04 = €1,312,500.


Remember, this is a simplified example. Don’t forget to factor in the state pension you’ll receive from age 66 onwards.


Here are some resources to help you get a more personalized estimate:



Where to from here:

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Early retirement is a fantastic goal, but careful planning is crucial. By considering your lifestyle goals and using the available resources, you can determine the magic number you need in your pension pot to make your dream Irish retirement a reality.


Be sure to sit down with one of our Financial Advisors to discuss your personal situation and figure out how much you need to retire early.



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