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Cost of living makes workers fear for retirement, survey finds

Many workers are likely to fall short of income expectations when they stop work, research suggests

Rising living costs have workers worried that they will not have enough money saved to retire when they had expected to, according to a State Street survey

Dominic Coyle
Sat Jan 27 2024 - 05:05

More than four-in-five Irish workers say they will need an income of €30,000 or more annually in retirement but worry that they will fall short, forcing many to work for longer than expected. That is the finding of a new survey carried out by financial advisers State Street.

The rising cost of living in recent years has dented Irish workers’ optimism and confidence about retirement, with almost half saying their retirement outlook changed recently, up from 29 per cent a year previously.

More than half (52 per cent) said they would need to have annual pension income of between €30,000-€50,000 to maintain a reasonable standard of living. At the bottom end of that range, and allowing for the fact that a State pension would contribute about €14,420 of the amount required, a person would need a retirement fund of about €500,000 to make up the balance. Another three-in-10 people targeted an even higher income.

The savings required for income in retirement of €50,000 per year would be closer to €1 million.

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Figures from surveys by Irish brokers suggest that the average Irish pension fund is much closer to €110,000 at the moment, meaning retirement income is going to come in sharply lower than what respondents consider they need – under €20,000.

There were 600 people in the State who were among 4,200 questioned for the international survey. The other respondents came from Canada, Australia, the UK and the United States.

Close to half said they were either not optimistic at all, or only slightly optimistic that they will be financially prepared for retirement when the time arrives. A similar number is worried they might not be able to stop working at that time after all.

Dominic Coyle

Dominic Coyle

Dominic Coyle is Deputy Business Editor of The Irish Times

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