Q I’m getting worried about my retirement as I didn’t start saving for retirement until my very late-30s and even then, I didn’t put much away. I’m 45 next year and I don’t know if I’ll be able to afford retirement.
This was a longer question than normal so I have added more of the information provided in your email to help reader understand your query.
You say that you “recently celebrated your 45th birthday, and that while you’ve made recently tremendous strides in managing your personal finances, you’re regularly preoccupied with the thoughts that it’s not enough”. In fact you stated that “I most likely won’t have enough money to retire. Neither of my parents taught me about personal finance, so I didn’t learn about the importance of saving or investing while growing up and planning for retirement wasn’t on my radar. It was never a priority when I was about 19 years old starting my first job. It was extremely confusing, and I couldn’t care less. Being that young, it just seemed like something I didn’t have to worry about for a few decades.
This lasted throughout my 20s and well into my 30s. During this time, I had some great jobs, but I spent irresponsibly. I finally became financially stable, but it was too late as I was 36 years old. When I started my current job in 2011, I started putting €240pm toward my retirement each month. I’m proud of myself for doing this, but then I snap back to reality and realise how far behind I am. In total, I have a little over €23,000 saved for my retirement. When I checked an online retirement calculator, it said I should have €800,000 saved by the time I retire, but at this rate, I’ll have way less than that. Now, I’m concerned that I’ll be one of the 90-year-old part time workers I see who are clearly working because they have to in order to survive.
Even though it’s late for me, I’ve taken all these lessons and am now passing them on to my son. He’s 17, and I’m already teaching him the benefits of saving and investing. He knows that as soon as he starts working, it needs to be a priority to start saving for retirement so at least he’ll have a head start”.
Finally you added “I am a workaholic, so I don’t ever see myself fully retiring and I’m focused on looking for ways to increase my income at my current job. I also hope to have side hustles bringing in some extra income to add to my retirement plan. I haven’t lost hope, and I’m still doing what I can to save for retirement, but it’s difficult to stay optimistic. Is it too late now?”.
A. It’s never too late or too early to plan for your retirement.
There is such a reluctance in this country with starting pensions. We all think it’s ages away and we have more pressing priorities but we all need to address this now, whatever our age. There is a big difference between starting at 25 and 45 as every 10 years that you delay starting saving means you double the cost of how much you need to put away to get to the same place when you retire. Saving into your pension is arguably the best and most needed tax break left. It takes a good chunk of time, adequate saving and good investment choices to produce a decent-sized pot. People still don’t realise saving for a pension is so tax-efficient, which is a shame.
There are many pension plans available and professional advice is so important as no two people are alike, nor their circumstances the same and you will need specific advice on your own personal situation. This is especially important if you have less than 5 years to retirement as you may not have the time required to recover from any drop in value.
Talk to a Financial Broker and they’ll calculate what you need to start paying to bridge the gap between what you have and what you want. They will help you work out what you need. not to survive, not as a pensioner, but as a retiree. What are your plans, how will you pass your time? They’ll tell you not only what’s there, but what it will buy you when you eventually retire.
You may decide to, or be forced, to continue working past pension age. After all retiring isn’t for everyone and for many the ability to continue to work beyond the traditional retirement age is hugely important.