Irish people’s retirement standard of living expectations are out of line with the average income of €4k p.a according to a recent Standard Life survey of 1,005 adults.
When respondents were asked whether they expected their retirement standard of living to be the same, higher or lower, 42% said they expected it to be the same or higher. Almost a third expected it to be lower and over a quarter or 26% didn’t know or hadn’t thought about it.
The research indicates that the most popular amount saved into a pension is less than €50 per month. Assuming at best €49 per month is saved over thirty years, it will yield an income of approximately €1,800 p.a. If an individual saves an average of €164 per month over 30 years it will yield an income of approximately €6,000 p.a.
Standard Life’s research consistently shows the average person wants to retire on approximately €30k p.a. If the average saver subtracts their combined state and private pension (e.g. €6,000 + €12,400 or €18,400) their shortfall is €11,600 per annum or a pension pot of €270,000. Using the same assumptions as above that equates to an extra saving of €312 per month to reach the desired retirement income goal.
Commenting on the research, Standard Life’s pensions technical spokeswoman, Sinead McEvoy said, "Irish people’s standard of living has rocketed in the past 20 odd years, holidays abroad, drinks, dining out, lattes, running a car or two is relatively commonplace. But even if you assume the average person is entitled to a full state pension of almost €12,400, p.a. an income of c€16,400 p.a.is not going to keep most Irish people in the style to which they have become accustomed - and as the survey shows, many expect to match or even better in retirement."
Source: www.businessworld.ie
