Will your retirement income be enough for the lifestyle you want?
Retirement can seem a long way away. But understanding how your current pension savings and contributions could translate into retirement income gives you more time to make informed decisions.
The Income Edit Retirement Gap Calculator helps you estimate whether your potential retirement income could meet the income you want in retirement.
In just a few minutes, you can see:
- your target retirement income
- what your current pension savings and future contributions could potentially provide
- how the State Pension could contribute to your retirement income
- your estimated private pension income
- your estimated total retirement income
- whether you could have a retirement income gap
- what that potential gap could mean each month
- how much of your retirement income target you could currently meet
Start planning your retirement
The calculator answers a simple but important question:
Will my expected retirement income be enough for the retirement I want?
Enter some basic information about your age, income, pension savings, contributions and retirement plans.
You don’t need to be a pension expert. The calculator gives you a straightforward illustration of your potential retirement position based on the information you provide.
What does the Retirement Gap Calculator show?
Once you complete the calculator, you’ll receive an estimate of your potential retirement income and any gap between your target and estimated income.
Your target retirement income
See how much annual income you would like to have in retirement, expressed in today’s money.
This gives you a clear starting point for thinking about the lifestyle and spending you may want in retirement.
Your estimated retirement income
The calculator estimates the retirement income your current pension savings, future contributions and potential State Pension could provide.
You’ll see your estimated income from:
- the State Pension
- your private pension
- your combined estimated retirement income
Your potential retirement income gap
If your estimated retirement income falls below your target, the calculator shows the potential shortfall.
For example:
€X per year
or:
€X per month
Seeing the difference in monthly terms can make a potential retirement income gap much easier to understand.
Where could your retirement income come from?
Your retirement income may come from several sources.
The calculator separates your estimated income into:
State Pension
and
Private Pension
This helps you understand how much of your desired retirement income could potentially come from your own pension savings and contributions.
Understanding this balance can help you identify how much responsibility your private pension may need to carry in retirement.
What if you have a retirement income gap?
Discovering a potential retirement income gap doesn’t necessarily mean you have a problem.
The purpose of the Retirement Gap Calculator is to give you greater clarity about your current position.
Once you understand the potential gap, you can explore the options that may help you improve your retirement outlook.
Consider increasing your pension contributions
Increasing your personal or employer pension contributions could potentially increase the amount available when you retire.
Even relatively small changes can make a difference when you invest over many years.
Consider retiring later
Working for longer can give your pension savings more time to grow while allowing you to make additional contributions.
Delaying retirement may also reduce the number of years your pension needs to provide an income.
You may also want to consider other potential sources of retirement income. Read our blog on potential sources of retirement income in Ireland.
Review your retirement income target
Your retirement income target should reflect the lifestyle you expect to have in retirement.
Think about the costs you may face, including housing, travel, transport, healthcare, hobbies and everyday spending.
Your retirement income needs may also change over time, so review your target as your circumstances change.
Review your existing pensions
You may have more than one pension from previous employment or different pension arrangements.
Reviewing your existing pensions can help you understand what you have already built up and how your different pension pots could contribute to your retirement income.
The important first step is to understand your position before making decisions.
Planning to retire early?
If you plan to retire before you expect to receive the State Pension, you may need your private pension and other savings to provide your income during the gap.
For example, if you retire at 60 but don’t expect to receive the State Pension until later, your private pension may need to cover some or all of your income during those years.
The calculator takes your planned retirement age and expected State Pension start age into account when estimating your potential retirement position.
This makes early retirement planning an important part of understanding your retirement income needs.
How does the Retirement Gap Calculator work?
The calculator uses the information you provide to create an illustration of your potential retirement position.
It considers factors including:
- current age
- planned retirement age
- current pension value
- monthly personal pension contributions
- monthly employer pension contributions
- desired retirement income
- expected State Pension
- the number of years until retirement
It then applies a set of assumptions to estimate how your pension savings could potentially develop between now and retirement.
Investment growth
The calculator assumes investment growth of 4% per year above inflation.
This is an illustration only. Actual pension investment returns can be higher or lower and will vary over time.
Results shown in today’s money
The calculator expresses its results in today’s money.
This makes the figures easier to compare with your current income, spending and lifestyle.
Pension contributions
The calculator assumes that your current monthly personal and employer pension contributions continue until your planned retirement age.
Your actual contributions may change over time.
State Pension
For illustration purposes, the calculator uses the current maximum State Pension (Contributory) amount.
Your actual State Pension entitlement may be different. It depends on factors such as your PRSI contribution record and the rules that apply when you retire.
Estimated retirement income
The calculator uses a 4% annual withdrawal assumption to estimate the potential income that your private pension fund could provide.
This is an illustration and does not guarantee the amount of income your pension could provide in retirement.
Tax
The retirement income figures shown by the calculator are before personal tax.
Your actual after-tax retirement income will depend on your circumstances and the tax rules that apply when you retire.
Important information about this retirement calculator
The Income Edit Retirement Gap Calculator provides an educational illustration of your potential retirement position. It does not predict your future retirement income or guarantee what you will receive in retirement.
Your actual retirement position can be affected by many factors, including:
- investment performance
- pension charges
- pension contributions
- inflation
- tax
- changes to pension and State Pension rules
- changes in your personal circumstances
- the age at which you retire
- the amount you ultimately have available in your pension
The calculator uses the information and assumptions you provide to produce an estimate. Your actual results may differ significantly from the figures shown.
The calculator does not recommend a particular pension, investment or financial product. It does not constitute financial advice, a personal recommendation or a guarantee of future investment returns or pension income.
Pension and State Pension rules can change over time. You should consider your individual circumstances and seek appropriate professional advice if you need help making financial decisions.
Use the result as a starting point to understand your potential retirement position and identify the questions you may want to explore further.
our potential retirement income and identify the questions you may want to explore further.
Ready to see your potential retirement income gap?
Take a few minutes to understand where you currently stand.
Use the Income Edit Retirement Gap Calculator to estimate:
Target retirement income
Estimated retirement income
Potential retirement income gap
Estimated monthly gap
The earlier you understand your potential retirement position, the more time you have to consider your options.
Start your retirement income calculation today.
Read more blog posts on pensions and retirement planning here.
