Who is responsible for your income in retirement?

Financial and economic experts across the world are encouraging us all to save for retirement.


BEFORE you answer that question, consider these facts. In 1990 there were only 73,000 people in receipt of the state contributory pension. At the end of 2020 there was almost 450,000 people in receipt of this same social insurance pension.

Financial and economic experts across the world are encouraging us all to save for retirement. This is to ensure our financial independence, and to avoid poverty in retirement. The adverts say: “don’t wait to start in five years or 10 years time. Start now”.

Why now? What’s the rush? Is it for their well-being? Or for our wellness?

Well the State pension contributory (SPC) from January 1, 2023, is €265.30 per week. 50 years ago this was payable from 70. The state pension age has since been reduced to 66.

The Pensions Commission Report of 2021 reported that without social welfare benefits, 85% of the over-65s would be at risk of poverty. Therefore, those in the know are stressing the need to make it a top priority now if you want to maintain (or improve) your current lifestyle, in your silver-haired years.

In our experience, the more educated, professional, and financially literate 30 and 40-year-olds are paying attention. They are deferring paying themselves a little now, to gain a lot.

They certainly want a better standard of living than what the SPC currently offers. The workforce also realise that they might want to give themselves the option to reduce their working hours, maybe take more holidays, before reaching SPC qualifying age.

What are the consequences of not planning, apart from paying more income tax now?

How many years do you expect to live comfortably in retirement and on what income?


There are many advantages to remaining in gainful employment. It means you can maintain people friendships built over years plus it can give you a sense of purpose. You may enjoy working, availing of new job opportunities, or maybe trying a new career all together? All good reasons. However, if the reason for remaining in the workforce is to make ends meet, that creates its own pressure. At Infinity Financial Planning we ensure people plan to avoid such a stressful circumstance. A few questions for you about your current situation.

The current ‘cost of living crisis’ is perhaps a major reason for not starting to save for a pension. But is inflation a major reason to start a pension plan? Is this a good enough reason to avoid the issue completely?

The latest statistics show that contributions of almost €6,000 per annum will equate to a pension at 60 (yes 60) of over €13,500 per annum.

However, to achieve the same outcome and start contributing five years later requires almost €9,000 per annum of inputs. So you can see, delay seriously costs. Those that understand compound interest can earn it, by commencing even the most modest of pension contributions as early as possible. There is no tax on investment growth on pension monies. A huge plus.

I’ve left it too late? A common enough excuse. Too late to avail of a tax refund from Revenue of income tax you paid last year? Really?

Look at the extras. Tax free lump sums. Interest free growth.

As Tony Gilhawley says: “Tax reliefs are the rocket fuel of private pensions, particularly relief on contributions.”

It’s never too late.

My business will be my pension. Hopefully, this is true. Most businesses realise that to be successful you should not put all your eggs in one basket.

Diversify, have your pension pot, have the SPC, have the business reliefs, have the rental income, have the consultancy income. Good business people extract wealth from different sources and certainly avail of all tax reliefs available.

Poverty type scenarios in retirement can be avoided if you take responsibility.

Most people do not have the time or expertise to research, monitor, and evaluate where their hard-earned money should be invested. Private pensions mostly provide capital at retirement now, rather than a pension or an annuity. Pension simplification usually ends up making things even more complex, with a need for more advice.

The need for quality advice never changes. We help you build it, fund it and stick to it.

Who is responsible for your income in retirement? You!

If you’d like a chat about your current options and choices in this area, call us today, 021 4508851.

That first, no obligation meeting, will be at our expense. It will be worth it.

See www.infinityfinancial.ie for more.

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