Finding a Comfortable Retirement

It will come as no surprise to learn that people who are optimistic will have a brighter outlook of their prospects of funding a comfortable retirement; this is obvious given the definition of what it means to be optimistic, always looking for the positive.

However, the reality is that most of us are constantly bombarded with negative stereotypes, normally delivered via the media, about our prospects of having an agreeable retirement. It is easy to develop a sense of panic when considering our future financial stability during retirement. Well, good news, this article will document the many reasons for feeling optimistic and hopefully alleviate some fears that you may hold.

Firstly, do you really need as much of a nest egg as you have thus far supposed? If you have ever tried to discover ways of estimating the amount of capital you will need to maintain the same  lifestyle that you currently have during your retirement, you may have found that you have a deficit between what you need and what you have.

But, fear not, when you arrive in the retirement years you will find that your circumstances would have drastically changed from the time when you first calculated your financial requirements. For example, consider these life changing events, they will all involve a reduction in the amount of income you need in order to survive; by the time you enter your retirement you will probably have either paid-off your mortgage or, at the very least, reduced it significantly.  Your children would have grown up and flown the nest a long time ago, and have hopefully stopped asking you for money; you will have to pay less social security taxes on your income, thus receiving more of your gross pay than you otherwise would have had you still been in employment.

The situation is starting to brighten already, is it not? These changes to lifestyle, that are the norm for most people entering into retirement, can mean that a person will only need to save enough for 65-75% of the income to which they were accustomed during their working lives. The cost of living is actually reduced, you will need to worry about food, clothes, bills and leisure time, but a huge proportion of your outgoings would have been significantly reduced.

This is all great news for individuals who feel that they have not been making sufficient contributions to their pension in Ireland, you may not have the €1 million you were hoping for, but you may not even need that much, and by making additional contributions now, maybe 0.5% of your current gross pay, you will be making a huge difference to your retirement.

Even better news; following all the depressing economic forecasts of the past year, it seems that the recession is beginning to turn a corner. All good things come to an end, but so do all bad things too! The economy is still fragile, and economists are unable to predict the rate and significance of any improvements, it is still, nonetheless, bouncing back from the brinks.

An Irish pension plan is one of the safest investments a person can make when saving for their retirement.  If you do a little research you will see how certain individuals who had invested in real estate as ways of securing financial freedom were badly affected by the sharp fall in the property market, they may be starting to breathe a sigh of relief now, but there are no sure fire ways of knowing that the economy will not crash again, and if that happens again these individuals may find themselves in a more precarious situation than they found themselves in this time. For example, they may have been planning to retire at the same time as the economic crash, but find they need to defer their retirement as it becomes financially unviable in an uncertain economy.

Of course, whenever a person places money in any investment, it will mean forgoing consumption in the here and now, for the luxury of being able to make purchases in the future. Forgo today, live it up tomorrow.

For another positive view of pension planning and retirement consider your own health, a vast majority of people are still as fit as a fiddle well into their 60’s and 70’s, and many of these individuals like to work, this means that there are now, probably, more years in which to save for old age, and this can only be a positive thing, surely?

This article is based on the authors own observations and research and is not associated with any 3rd party organisations.