Call us on (091) 670 123 | [email protected]

Retirement plans in crisis: what you can do to avoid the State pension squeeze

There has been much made in the media of the recent Pensions Commission report handed down by Social Protection Minister Heather Humphreys where the recommendation was put forward to increase the State pension age to 67 in 2031.

With little likelihood of a Sinn Féin backed return to the pension age of 65, the State pension age is instead set to rise by three months each year from 2028, followed by quarterly increments to age 67 between 2028 and 2031. The report also recommends the pension should then gradually increase to age 68 by 2039.

Evident of a social insurance fund in crisis, Minister Humphreys plans for legislation to tie workers’ contracts to the new retirement age so there is no gap between their retirement and receipt of the State pension.

The awful state of our social insurance fund

The reality is that Ireland’s social insurance fund just does not have enough to support its ageing population, so workers will have to work longer to qualify for the State pension.

Right now, there are approximately four-and-a-half people at working age that are supporting each person 65 and over. However, by 2050, this number is expected to more than halve.

In 2020, the social insurance fund recorded a shortfall of €2.3bn. By 2070, that is expected to rise to €21bn. In the meantime, by 2041, the amount Ireland spends on pensions will be equivalent to the entire amount of the social insurance fund receipt.

Expectations in retirement

We all have different expectations of what our retirement might look like; some people may want to travel and enjoy the freedom of hitting the road in an RV, while others might enjoy taking up new hobbies and interests, and eating out with friends and family.

You might think that if you own your own home, and have a little savings, that the State pension will be enough to cover what you need for a comfortable retirement.

Any savings you have will need to last 20 years in retirement for women aged 66, and 17 years for males when they retire based on current mortality rates.

That will need to cover your day-to-day expenses, the costs of maintain your home and car, and also any medical expenses, which do rise significantly as we get older.

Unfortunately, our savings never last as long as we think. If the €237 a week State pension is all you have left to live on, retirement may look pretty bleak.

How much do you really need in retirement?

A quick calculation can provide some context around what you should aim for in retirement.


  1. Start with your pre-retirement income: €60,000
  2. Take 50% of your pre-retirement income: €30,000
  3. Calculate the difference between B and the State pension: €30,000 – €12,324 = € 17,676

There is a €17,676 annual shortfall between the State pension and what you need for your retirement.

Contributing to a pension is one way to make up for the shortfall and ensure you have enough to cover your needs in retirement.

Speak to a member of our team to find out what you can do

The only sure way to achieve a lifestyle in retirement that suits you, is to create a steadfast financial plan that grows your retirement savings according to your needs.

If you are not sure whether you will have enough money in retirement to support the lifestyle you want, or have questions about starting a pension or moving one from another country, why not take the opportunity to book an obligation free discovery call with a member of our team?

Taking the opportunity to plan your retirement puts you in control of your lifestyle post-work, rather than carrying money worries at a time when you should really be enjoying life.

Call us on 091 670 123 today to book your free discovery call and get your retirement plans on track.

Our trusted partners

Where we are

Insurance Brokers & Financial Consultants,
Unit 3B, Tí Phuirséil,
Barna, Co. Galway.
H91 AF1W

Opening Hours

Monday - Thursday: 9am -5pm
Friday: 9am - 4pm
Appointments available outside normal working hours upon request.


Hennelly Financial Services Ltd. t/a Hennelly Finance & Health Insurance Shop is regulated by the Central Bank of Ireland. Directors H. Hennelly, R. Hennelly. Registered in Ireland, Company Reg No: 32727.
Copyright © Hennelly Finance | All rights reserved