Irish workers believe they will need almost €41,000 a year for a comfortable retirement, a new study shows.
Laws automatically enrolling people with no retirement savings into pension schemes came into force this year, but they can opt out this month and next.
Workers calculate that they will need pensions of €40,860 a year on average after retirement, a survey published on Thursday shows.
Men estimate that they will need €44,000 a year while women say the figure is €38,000 annually, the study of 900 workers found.
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Almost all of them do not believe that the State pension, close to €15,000 a year, will be enough to live on in retirement, the survey, by Royal London Ireland, established.
Workers frequently underestimate the savings they will need to guarantee a comfortable retirement, according to Mark Reilly, pension proposition lead at the firm.
He observed that the €40,860 average was not far off the mark, given that research in 2024 established that a single person would need €33,600 a year in retirement and a couple €43,200.
“However, whether or not people can secure whatever annual pension they are expecting will really depend on how they approach pension saving,” Reilly added.
Royal London Ireland calculates that to secure €40,860 a year on retirement, assuming they qualify for the State pension, someone earning €61,908 who starts saving at 30 would need to put away €1,135 a-month. That is 22 per cent of their income.
That person would need to be saving €1,395 a month if they started at 35 or €1,754 a month, one-third of their pay, if they began at 40.
A break down of the survey’s findings show that two-thirds of those who took part believe they would need from €20,000 a year to €50,000 a year to retire comfortably.
Only 3 per cent say the State pension is enough while 7 per cent would like more than €100,000 a-year when they retire.
Reilly argued it was crucial that people get a realistic understanding of their financial needs and have the time needed to build enough savings to cover what they will need in retirement.
“Otherwise they could be in for a significant financial shock when they retire and could even struggle to make ends meet,” he added.
