The reality is that providing retirement is expensive and the best way of reducing that cost is to start pension contributions as early as possible i.e. focus on time in the market rather than timing the market and let compounding be your ally

If you are looking to retire at 65, with a secure annuity income that inflates at 2% per annum, with a 50% spouses pension – even if you reach the pension limit of €2,150,000, your pension will only be €38,500 per annum!

Many of us will select the Approved Retirement Fund option, but bear in mind with negative interest rates and bonds combined with equities which are fully valued, the so called ‘safe withdrawal rate’ may be as low as 2%. It is certainly not the 4%-5% requested by Revenue.

Also bear in mind that it is highly likely that the age for drawing the State contributory pension will increase further.

So start as early as possible, aim for the maximum pension fund you can realistically afford, be disciplined and use our suggestions below to minimise any unnecessary drag on the growth of your fund.

There are many pension calculators available online where you input your desired retirement age, desired annual income when retired  which will calculate how much you need to be saving in order to meet this target. One such calculator can be found here