Are you are a 1980s child remembering carefree summers listening to your mixtapes?

On the face of it, the answer to when can you retire is some way off. In order to receive the State pension in Ireland, you’ll be waiting until at least 2046.

But by making some changes now and taking charge of your pension plan, you might not have to wait that long to stop working.

In fact, it’s possible to access pension savings from age 50 – or as soon as five years’ time if you were born in 1980.

When can you retire… financially?

Before you dive into that pension pot, some careful thinking is required.

Retiring early doesn’t happen by accident.  It requires a combination of early planning and strong savings levels over several years to make sure your financial position will remain strong for several decades.

Dipping in early has a double effect: it means your pension funds have less time to grow, and need to stretch out over a longer retirement period.

So what can I do today?

Whatever your current pension position, there are several steps you can take to accelerate the date when you’ll be able to afford to retire early.

1. Get serious about your pension payments

If you want to finish early, start early, and put in real money.  The power of your money compounding means that because of investment growth, a contribution of €100 per month when you’re 25 can have the same impact as around €450 per month twenty years later.

If you’ve only recently focused on your exit, you may have some catching up to do.

That likely includes making the maximum contribution to a pension for which you can gain tax relief. If you were born in 1980, that’s 25% of your income up to €115,000.  Here’s a table of how much you can pay in, and how much tax you can save, depending on your salary.

Annual salary €	Max you can pay in each month €	Monthly tax saving €	After-tax cost to you each month €
150,000	2,396	958	1,438
125,000	2,396	958	1,438
100,000	2,083	833	1,250
75,000	1,563	625	938
50,000	1,042	308	733
25,000	521	104	417

Note: assumes single person’s tax credits for 2025. 

2. It’s how you invest as well as what you invest

Pension plans are not all the same.  To maximise your retirement pot, you’ll want to achieve the best combination of competitive costs, appropriate investment choices, and flexible terms.

And if you’re planning on retiring before the end of the decade, you’ll want to invest your pension funds differently than if hanging up your boots is several decades away.

3. Get good quality financial advice

Good advice pays for itself.  If you’re breaking out from a conventional route to retirement, you’re going to need some carefully laid plans.

Here at Moneycube, we’ve often helped customers drive down the cost of their pensions, increase financial performance, and get better value from the tax benefits a pension offers you.

4. Take a look at your old pensions

If you’re well underway in your career, it’s likely you have a handful of old pensions from jobs you’ve left. Now’s the time to dust them down and evaluate the role they can play in helping you exit the workforce early.

Remember, in order to retire, you don’t have to draw all of your pensions in one go. A pension from an old job could provide a route for you to draw a tax-free lump sum and pay off your mortgage or reduce your working hours for example.

5. Build a bridge

Optimising your pension doesn’t stop at early retirement. It is hard to reverse your retirement decision once you pull the trigger. So you need to build a bridge to the age when your full pension benefits come in.  You can read more on this in our recent conversation with the Sunday Times [pdf].

 

Get in touch with Moneycube today to see how we can help you bring forward the day you retire.