Post-retirement planning is crucial for ensuring a financially stable and fulfilling life after retirement. Many people focus on saving extensively during their career, but underestimate the need for managing those savings post-retirement. When there is a lack of proper planning, even a well-funded retirement portfolio can fail to meet the requirements. This is where a comprehensive retirement planning strategy comes into play. Here are five essential tips to
1. Understand your retirement expenses
Many people often misunderstand retirement budgeting in Ireland, assuming that retirement life is cheaper. However, when you navigate between travel, healthcare, home repairs and utility bills, it won’t remain the same. To make better arrangements for their retirement expenses, one must consider the following:
- Create a detailed retirement budget based on your lifestyle.
- Factor in healthcare, insurance, inflation, and unexpected costs.
- Use an Irish retirement calculator
Keep in mind that a clear budget today can help you overcome the financial burdens of tomorrow.
2. Set up a personal retirement savings account
The Irish State Pension offers a safety net in the form of the state pension. However, one should consider alternative options to get adequate support post-retirement. The current weekly rate for the State Pension (Contributory) in Ireland is €277.30. It is the maximum personal rate for those who qualify and retire in Ireland at age 66. It provides aids to cover the basic expenses, but it is not feasible to get the lifestyle most retirees hope for. One must consider setting up a Personal Retirement Savings Account (PRSA) or occupational pension. A Personal Retirement Savings Account (PRSA) in Ireland is a long-term savings plan designed to help individuals save for retirement. It’s essentially an investment account where you can make regular or lump-sum contributions, and these contributions are usually tax-deductible.
3. Start early to save larger sums of money
One of the common retirement mistakes that you should avoid in your retirement planning is starting too late. If you start saving in your late 40s or 50s, it can lead to delaying retirement or a need for higher contributions. However, even if you save the same amount each month, you will have thousands more by retirement if you begin making pension contributions at age 25 rather than age 35. That is the advantage of time
- It is recommended to set up a pension fund in your 20s or 30s with even small amounts (e.g. €50/month).
- Look for approved retirement funds for investment.
4. Consider healthcare and long-term costs
Healthcare is one of the most important considerations in retirement planning. While Ireland has a dependable public system, long-term health treatment can involve significant cost, and it is wise to make arrangements for funds in advance to avoid insufficient funds to meet your requirements
- Review your health insurance annually with providers
- Build a dedicated buffer into your savings plan.
- Consider income protection or serious illness cover
5. Review your retirement plan regularly
As life evolves, so should your financial strategies to deal with it. Even if you have chosen the best retirement plan, it must be regularly updated. One should review their pension contributions, investment performance, and risk annually. Seek advice from a qualified financial advisor
- Consider a mix of assets: stocks, bonds, property, and cash
- Review your pension fund’s risk profile regularly, especially as you approach retirement age.
- Talk to your pension provider about investment options and switching funds if needed
Looking for post-retirement advice? A well-thought-out retirement plan isn’t just about money — it’s about security, flexibility, and enjoying the life you’ve worked hard to build. Eolas Money has highly qualified financial planning advisors to support you in enhancing the financial well-being of people preparing for retirement by helping them to take the right actions for improving their retirement outcomes.
