How Much Do I Need to Retire?

Niamh De Búrca
Sep 25
2 min read

Retirement isn’t just a date on the calendar, it’s a financial milestone that requires thoughtful planning. The question “How much do I need to retire?” doesn’t have a one-size-fits-all answer, but here’s how to start figuring it out.

What Will You Need in Retirement?

Your retirement income needs depend on several personal factors:

Outstanding financial obligations: Will you still have a mortgage or dependents?
Lifestyle expectations: Will you maintain your current standard of living or downsize?
Passive income: Will you continue to receive rental income, dividends, or other unearned income?
Pension entitlements: What will your private pensions yield, and are you eligible for the State Pension?

The Income Gap: Average Salary vs. State Pension

Let’s look at the numbers:

Income Type	Weekly (€)	Monthly (€)	Annual (€)
Average Net Salary	€773.00	€3,349.00	€40,199.00
Full State Pension	€289.30	€1,253.00	€16,043.60

Bar chart showing income sources across ages 32 to 102 for a couple planning retirement. Early years (32–62) include earnings from both partners and child benefit. After age 62, income shifts to state pensions only, highlighting a significant drop in total income post-retirement. — These illustrations are drawn directly from the graphics in our app.

If your current lifestyle is based on the average Irish wage or something similar, transitioning to the State Pension alone creates a significant income cliff, a drop of nearly €2,100 per month. That’s a wake-up call for many.

Here we illustrate a couple with one child who wish to retire at 60.

One party takes home €3,150 net a month (increasing at 2% a year) and the other €3,000 a month (not increasing).

Avoiding the Retirement Cliff

If you’re staring down this income gap, it’s time to take action. Here are four strategies to consider:

1. Boost Your Private Pension Contributions

If you can afford it, increase your pension savings. Contributions are tax-deductible, meaning you get immediate financial relief while building long-term security.

2. Delay Retirement

Working longer gives you more time to accumulate assets and reduces the number of years your retirement savings need to stretch.

3. Review Your Investment Strategy

Make sure your pension funds are aligned with your investment risk tolerance and retirement timeline. A well-chosen and annually reviewed strategy can make a big difference!

4. Trim Your Lifestyle Costs

Not our favourite option, but always worth a review. Cutting unnecessary expenses now can free up funds for debt reduction, pension contributions and savings whilst also reducing your future income needs.

Here the same couple with the same earnings hold off retiring until they reach 65 and make pension contributions of 15% each into a well chosen private pension arrangement and underlying investment strategy.

All of a sudden the cliff edge is significantly reduced!