One of the most common questions I hear as a financial planner is simple on the surface — but deceptively complex in practice:
“How much income will my pension actually give me if I retire at 60?”
It’s a hard question to answer without a framework. Because it’s not just about the size of your pension pot. It’s about:
How long that money has to last
What happens before the State Pension begins at 66
And how you draw from your pot safely, without running out too soon
In this article, I’ll break it down with three practical examples:
A €250,000 pot
A €500,000 pot
And a €1 million pot
We’ll factor in inflation, fees, the Irish State Pension, and sustainable withdrawal strategies. By the end, you’ll see not just the raw numbers — but also the five levers you can pull to improve your outcome, whatever your starting point.
Setting the Scene: The Assumptions
Before we dive into the examples, let’s set some ground rules.
We’ll model a couple retiring at 60, planning for income to last until 95. That’s a 35-year retirement — longer than average, but the real risk isn’t dying too soon, it’s living too long.
Their pensions remain invested in a balanced portfolio of 60% global equities and 40% bonds. Historically, this kind of mix has returned 7–8% per year. Here we’ll be conservative, assuming 5.5% net of fees.
Other assumptions:
2% inflation per year
1% annual fees for investment management and advice
All figures are shown in future euros (already adjusted for inflation)
We’ll also assume the tax-free lump sum isn’t blown in year one. Instead, it’s set aside in a deposit account earning 1.5% — providing a buffer for flexibility or emergencies.
And of course, the State Pension:
Begins at 66
Pays about €15,000 per person (or €30,000 for a couple)
Fully inflation-linked
If you’re single, the same principles apply — just halve the State Pension figures.
Think of this not as a prediction, but a practical baseline.
The €250,000 Pot: A Modest Start
Let’s start with €250,000 at age 60.
The conventional 4% rule suggests you could safely draw €10,000 per year. But that hardly covers a couple’s lifestyle — it’s survival, not retirement.
Now let’s stress-test against the median disposable income for retired couples in Ireland: about €42,800 per year.
At that spending level, the €250,000 pot is gone by age 67. The reason? Those first six years before the State Pension starts at 66 drain the ARF rapidly. By the time the State Pension arrives, there’s little left.
On its own, a €250,000 pot cannot sustain a couple retiring at 60.
The State Pension: Changing the Picture
Bring in the State Pension at 66, and the outlook changes.
From 60 to 65, the couple lean heavily on their ARF and lump sum. But from 66 onwards, the €30,000 State Pension becomes the anchor. Suddenly, the ARF only has to top up the difference rather than cover everything.
The result? The couple can sustain about €37,250 per year right through to 95.
The lesson is clear: €250,000 on its own isn’t enough. But with the State Pension — and careful drawdown — it becomes viable.
Can You Rely On That Income?
On paper, €37,250 looks sustainable. But what about real-world risk?
The State Pension is unlikely to disappear. Access ages may rise, but the benefit is politically and socially too important to scrap.
The real risk lies in your private pension. Specifically, sequence risk: the danger of poor investment returns early in retirement. If markets fall while you’re also withdrawing, your pot takes a double hit that’s hard to recover from.
This is why financial planners use stress-testing — modelling thousands of scenarios, good and bad — to estimate the probability of success. For our €250,000 example, the €37,250 drawdown is designed to hold up in 9 out of 10 scenarios.
It’s not just a number. It’s a robust, tested strategy.
The €500,000 Pot: Doubling the Savings
Now, what if you retire at 60 with €500,000?
You might assume doubling the pot doubles the income. But it doesn’t.
The model shows a sustainable income of about €53,250 per year. A solid step up from €37,250, but not double.
Why? Because the pressure point remains those first six years before the State Pension. That’s when withdrawals are heaviest and sequence risk is highest. Even with a larger pot, the early drawdowns bite hard.
The lesson: more savings help, but timing and strategy matter just as much.
The €1 Million Pot: Maximising Drawdown
Finally, let’s look at €1 million at age 60.
If you stick with the same cautious strategy as the €500k example — drawing €53,250 per year — the pot doesn’t just last, it grows. By 95, you’d still have €1.7 million left in today’s money.
Why?
The lump sum is larger, absorbing early spending.
The ARF is protected early, giving compounding time to work.
But what if you don’t want to leave that much behind?
If the couple maximises drawdown, the sustainable income rises to about €78,750 per year right through to 95. That’s the lifestyle a €1 million pot can realistically support.
Comparing the Three Pots
Side by side, here’s the outcome:
€250,000 pot → ~€37,250 per year
€500,000 pot → ~€53,250 per year
€1 million pot → ~€78,750 per year
Notice how income rises, but not proportionally. Doubling your pot doesn’t double your income. Why? Because the bottleneck is those first six years before the State Pension. That’s when the ARF works hardest, and when strategy matters most.
Five Levers to Improve Your Outcome
The good news? Your outcome isn’t fixed. Here are five levers you can control:
Retirement Age – Retiring later shortens the gap before the State Pension and gives contributions more time to grow.
Contributions – Every top-up in your 40s and 50s compounds. With 40% tax relief, €100 contributed may cost you just €60 net.
Withdrawal Strategy – Be flexible. Take more in strong years, less in weak ones. Don’t fix your income for 35 years.
Investment Balance – Too conservative? You risk inflation eroding your pot. Too aggressive? You risk losses at the wrong time. The balance matters most early on.
Regular Reviews – Your plan isn’t set in stone. Annual reviews allow you to adjust as markets, tax rules, and your life evolve.
Together, these levers can make a bigger difference than pot size alone.
Final Thoughts
At 60, the numbers look like this:
~€37,250 with €250k
~€53,250 with €500k
~€78,750 with €1m
The real insight? It’s not just the pot size that matters. It’s the timing, the drawdown strategy, and how you bridge those first years before the State Pension.
If you’re unsure where you stand — whether you’re ahead, behind, or just unclear — this is exactly the type of modelling I help clients with.
We’ll map your pensions, investments, cashflow, and taxes into a joined-up retirement strategy. One that shows you what you can actually spend, how to draw it tax-efficiently, and how to make it last.
And if you found this breakdown useful, keep an eye out for the next article: What If You Retire at 65 Instead of 60? The difference is dramatic — and it could change how you think about your own retirement timing.
I empower people to take full control of their finances, guiding them step by step towards building, growing, and preserving true wealth.
About the Author
Kevin Elliott is a Financial Planner and quantitative finance expert with over 18 years of experience in global financial markets. He has worked with top-tier institutions such as Bank of New York, Bridgewater Associates, RBS, CIBC, UniCredit, and Bank of America, where he served as Director in New York.
Holding a BSc in Economics and Finance and a Graduate Diploma in Financial Planning from University College Dublin, along with an MBA from Imperial College London, Kevin combines deep technical expertise with a passion for personal finance and wealth building.
Kevin is committed to helping individuals take control of their finances, invest wisely, and build long-term wealth. With a knack for simplifying complex financial concepts, he provides actionable insights on investing, retirement planning, and financial independence.
Whether you’re a beginner looking to start your wealth journey or a seasoned investor fine-tuning your strategy, Kevin offers practical guidance, expert analysis, and proven strategies to help you achieve financial freedom and security.
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