More than 50% of Irish workers may face a significant drop in living standards when they reach retirement according to the latest research from the Central Statistics Office.
It is estimated about one million workers will be forced to rely on the State (Contributory) Pension of less than €250 a week when they reach retirement age, which is currently 68 for workers born after 1961.
This is complicated by more and more homeowners taking out new mortgages on 34-year terms, where an absence of personal savings can make managing retirement increasingly difficult.
A third of workers said they hadn’t “got around” to arranging a pension, while another third said they could not afford the extra expense.
The government’s auto-enrolment scheme, set to launch on 2022, is designed to begin to address the pensions shortfall.
Every worker between the age of 23 and 60 earning more than €20,000 each year will be automatically enrolled in the scheme, contributing 1.5% of their salary and rising to 6% after ten years of work.
The government is also working on proposals to see employers match employee contributions.
But will the auto-enrolment scheme be enough to help you meet your financial goals in retirement?
What are your plans and dreams for the “longest holiday of your life”, and are your retirement savings on track to help you achieve them?
Don’t leave your pension planning until it’s too late.
Why not give our qualified financial advisors a call now to find out how you can get your retirement planning on track? Call us on 091 670 123 today.