Most people in Ireland can’t answer one simple question: How much should be in your pension right now?
Not someday. Right now.
I run retirement models for clients every single day, and here’s what I see consistently — most people are years behind, and they don’t even realise it. The State Pension is brilliant, don’t get me wrong. Around €15,000 a year is a solid foundation. But here’s the problem: cost of living is rising, lifestyles are getting more expensive, healthcare costs are accelerating, and the State Pension isn’t keeping pace. That gap between what you’ll actually need and what the government provides? It’s growing significantly, and it’s up to you to fill it with a private pension.
Let me show you exactly where you should stand at every major age milestone, using real Irish data and actual benchmarks — not guesswork or marketing spin.
The State Pension Reality Check
Let’s start with the uncomfortable truth.
The maximum State Pension in Ireland is roughly 289 euros per week, which works out to just over €15,000 a year. For a couple, you’re looking at around €30,000 annually. Sounds reasonable until you compare it to real life.
The average Irish household aged 65 and over spends €42,000 per year, according to CSO data. That’s a €12,000 annual shortfall — every single year — just to maintain an average lifestyle. And that’s assuming costs stay flat. They won’t.
The State Pension replacement rate — that’s the percentage of your working income it replaces — has been in freefall. Back in 2000, it replaced 33% of the average wage. Today? Just 28%. But if you’re a higher earner, the picture gets worse. Earn €60,000? The State Pension replaces only 25%. Earn €100,000? Just 15%.
The point is clear: the State Pension is shrinking as a solution. It was never designed to fully fund retirement, and as life expectancy rises and inflation eats into buying power, the gap will only grow wider.
The €250 Billion Pension Deficit Problem
Here’s the big picture reality check that keeps me up at night.
Ireland’s private sector pension deficit is estimated at €250 billion. That’s not government debt — that’s how much private workers are actually short of what they’ll need to retire comfortably. Most people don’t even know it exists.
According to the Central Statistics Office, only 2 in 3 private sector workers are actively saving into a pension. Among younger workers, it’s catastrophically low. Just 27% of 20 to 24 year-olds are covered. Only 47% of 25 to 34 year-olds. Even in the 45 to 54 age range, one-third still have no pension at all.
The reasons? “My employer doesn’t offer one.” “I never got around to it.” “I’ll do it later.” “I can’t afford it.”
Here’s the brutal reality: every year you delay is costing you more than you think.
Let’s say you delay pension saving by just five years. That could cut your final pension pot by over 20%. Wait ten years? You lose nearly half. Wait fifteen years? You’re down 63%. It’s not because you saved less — it’s because you gave up compound growth, the most powerful tool you have.
Here’s a real example: start saving €3,000 per year at age 25, and you could end up with around €700,000. Wait until 35? You only get to €330,000. Same effort, 50% less wealth. To catch up, you’d have to contribute two to three times more just to stay on track.
Pension Targets by Age: The Prime Retirement Index
So what should you actually have in your pension right now? Forget vague rules of thumb. In Ireland, the most evidence-based benchmark is called the Prime Retirement Index. This index is built on over 100 years of investment market data, adjusted for inflation. It’s designed to help you replace between 50% to 75% of your final salary in retirement through a combination of pension income and the State Pension.
The Prime Retirement Index gives you clear, age-specific targets — what we call retirement savings multiples. These are the benchmarks you should aim to hit at each stage of life:
| Age | Target (Times Your Salary) |
|—–|—————————-|
| 35 | 1x |
| 40 | 2x |
| 45 | 3x |
| 50 | 5x |
| 55 | 7x |
| 60 | 9x |
| 65 | 11x |
This approach assumes you’ll draw from your pension each year and combine that with the State Pension to reach your income needs in retirement. These milestones are designed to help you build a pot that can sustain a 4% annual withdrawal rate for 30+ years without running out of money.
Let me be clear though: I believe the 4% rule should only be used as a rule of thumb and is not a substitute for robust financial modelling-based retirement planning. It’s a guideline, not gospel.
Real Numbers Example
Let’s say you’re earning the national average — about €44,000. Based on the Prime Retirement Index, your targets would be:
• Age 35: €44,000
• Age 45: €132,000
• Age 55: €308,000
• Age 65: €484,000
But here’s the reality in Ireland today. The average pension pot at 65 is around €180,000. At a 4% drawdown rate, that gives you just over €7,200 per year. Add the State Pension of €15,000. Total retirement income? €22,200 per year.
For many people, that’s simply not enough to maintain their lifestyle, especially with rising costs in housing, healthcare, and daily living.
Why These Targets Aren’t Just Numbers
I know what some of you are thinking: 11 times your salary by 65? That seems high. Why are these targets not just justified, they’re absolutely essential?
The State Pension Is Getting Smaller
Remember earlier when I showed you the State Pension replacement rate? In 2000 it replaced 33% of the average wage. Today, just 28%. For higher earners, it’s even worse. The State Pension was never designed to fully fund retirement, and as a percentage of what you’ll actually need, it’s getting smaller every year. Your pension has to fill that widening gap.
We’re Living Longer
Life expectancy in Ireland is rising. A 65-year-old today can expect to live another 20 to 25 years. Many will live into their late 80s. Some into their 90s. That’s 25 to 30 years of retirement to fund — not 10, not 15, but 30 years. The longer you live, the more your pension needs to last.
Healthcare Costs Are Accelerating
Here’s the reality most people miss. Private health insurance in your 60s and 70s? €1,800 to €2,300 per person per year. In your 80s? €2,300 to €2,800 plus per person. For a couple, that’s €4,600 to €5,600 per year. Over 30 years, that’s €140,000 to €170,000 — and that’s just insurance premiums before you pay a single medical bill.
Add in long-term care. One in three people over 65 will need significant care assistance. Private nursing home care? €57,000 to €73,000 per year. Home care with daily support? €30,000 to €50,000 per year. Many people need care for several years, so total care costs can easily reach €200,000 to €400,000 for one person alone.
We Don’t Plan for Best Case
Some people live healthy, active lives well into their 90s with no major health issues. They’re the best case. If that’s you, brilliant — you’ll have more than enough. But good retirement planning doesn’t plan for the best case. It plans for the worst case so you don’t run out of money.
Because here’s what happens if you plan for the best and get the worst: you’re 82, your health declines, you need care, and your pension pot is already half gone. That’s when the stress starts. That’s when you make hard decisions — cut your lifestyle, sell your home, rely on family.
But if you plan properly from the start and hit those 11x targets? You have options. You have security. You have dignity.
A Note for High Earners
If you’re earning €150,000 or more, these multiples still apply, but there’s a ceiling you need to know about: the Standard Fund Threshold.
That’s the maximum pension pot you can build tax-efficiently — currently €2.2 million, rising to €2.8 million by 2029. Go over that when you retire? You pay 40% tax on the excess.
So if you’re a couple earning €250,000 and you need €3 million for retirement, you can’t fit it all in pensions. You’ll need to diversify into liquid investments, property wealth, and other income streams. For everyone else? The benchmarks we’ve covered work perfectly.
Key Takeaways
• The State Pension provides around €15,000 annually — not enough to cover the €42,000 average household retirement spend
• Ireland’s €250 billion pension deficit shows most workers are significantly undersaved
• Use the Prime Retirement Index: aim for 1x salary at 35, rising to 11x by age 65
• Delaying pension saving by 5 years cuts your final pot by over 20%; 15 years cuts it by 63%
• Healthcare, long-term care, and rising costs make these targets necessary — not optional
• High earners need to plan beyond pensions due to the €2.2 million Standard Fund Threshold
What’s Your Current Position?
The benchmark isn’t about getting rich overnight. It’s about not running out. It accounts for the shrinking State Pension, longer life expectancy, rising healthcare costs, and the reality that most people will need some form of care.
When you see 11 times your salary by 65, don’t think “that’s too much.” Think “that’s what I need to age with dignity and maintain my lifestyle.”
If you’re wondering whether you’re on track or whether you’ve left it too late, that’s exactly what I help my clients figure out. I run the real numbers based on your specific situation — your income, your assets, your plans — and build a realistic roadmap.
[INTERNAL LINK: pension catch-up strategies for 50+]
Ready to know if you’re on track? Book a free strategy call with me, and we’ll run your specific pension numbers together. No jargon, no pressure — just real numbers and a real plan. Visit kevinelliottwealth.com to book your call today.