Skip to main content

There is no doubt that planning for retirement is a challenge. There are so many variables to consider that it can seem like an impossible task. But ultimately, it is a numbers game, and like all games, once you know the rules and tricks, it becomes a lot simpler.

To help you keep your retirement plans on goal, we have compiled a list of the things you need to get right to help you safely navigate the ever-evolving pension regulations and the ups and downs of the markets.

1.    It’s never too early to begin

Ah, the carefree days of youth, when retirement seems like a lifetime away and planning pensions is something for tomorrow or the day after, I mean, there is plenty of time to begin planning, right?

Well, no, while you can start planning for retirement at any time in your life, the earlier you start, the better!

Time is critical for pension investments to reap the long-term benefits of compound interest. The sooner you begin to save towards your retirement, the sooner you can retire, and you can contribute less each month to achieve your target.

The longer you can spread the cost of your retirement, the less stress is placed upon your everyday living expenses and the easier it becomes to reach your retirement goals.

If you are not convinced a simple calculation will tell you how many monthly contributions you have left before your planned retirement date, chances are it will be far less than you believed.

Also, the sooner you begin, the sooner you can benefit from:

  • Monthly tax-free growth and tax relief allowances
  • Monthly compounded returns

2.    Think about your retirement spending plans

This is one variable that can swing wildly from person to person, but there are some consistent factors that everyone should consider.

A common belief amongst people planning for retirement is that their expenses and daily spending will be around 70 to 80% of what it was. However, the fact of the matter is that you will have the additional costs of heating the home that you now spend more time in. Additionally, with more time on your hands, there is more time to go travelling, sightseeing, shopping and all those other things on your bucket list.

Of course, some people may be looking forward to a simple retirement with plenty of time to do nothing simpler than catch up on a lifetime’s reading list.

The important thing is to be aware of your retirement goals and plan accordingly. If you want to spend your time visiting the wonders of the world, you will need to factor this in. If you are quite happy sitting at home with a copy of War and Peace, then simple numbers dictate your retirement expenses will be lower.

3.     Inflation – The skeleton in every cupboard

Inflation is a necessary evil. A little inflation is always good for keeping the wheels of the economy well oiled. However, even a little inflation can have a devastating effect on pension investments, and as is currently being proved, inflation can be a volatile variable.

Any investment policy should factor in the effects of inflation, sometimes this can mean taking a riskier approach with some of your investment portfolio (more about this below), but to beat inflation is essential as the following table illustrates:

Time Value of €100,000 assuming 2.5% inflation
1 year €97,560
5 years €88,385
10 years €78,119
20 years €61,028
30 years €47,674
40 years $37,243


To put it simply, if your investments are returning 2.5%, they aren’t thriving, they are merely treading water. A 2.5% inflation rate is a good baseline to consider as the average inflation rate throughout the period of your contributions, and your investment policy should be tailored to match this at the very least.

4.    A little risk can be a good thing

Putting all your eggs in one high-risk basket is not a policy that will let you sleep well at night. But a little calculated investment spread over some riskier elements can pay dividends and help to beat the inflation beast.

The crucial thing is to be comfortable with the risks being taken. If you aren’t sure just what constitutes a “healthy risk”, then it is time to sit down and do some serious talking with a financial adviser.

Time is another soother of riskier investments. A little nerve may be needed to avoid bailing out of a risky investment the moment it takes a slight downturn. Remember, this is a long-term game, and today’s loss maker could be tomorrow’s inflation-busting investment.

Markets go through long-term cycles, and it is these that you should be looking to for guidance when it comes to considering investments with a higher risk factor.

5.    Create a financial plan

One great way to ensure that your retirement plans are always on track is to have a financial plan in place that lets you track your current finances and also lets you see just how well your retirement plans are doing.

A good financial plan should cover all aspects of your current and future finances and include factors like:

  • Income and Expenditure
  • Investments
  • Net worth
  • Value of debts

We all know that the path to financial freedom can be fraught with plenty of bumps along the way that are bound to upset the apple cart. However, a financial plan lets you see at a glance just how your finances are faring and what, if any, adjustments need to be made to ensure that your retirement plans are going as they should.

It also is a great way to keep you disciplined when it comes to planning for your retirement.


These days, more than ever, our pensions and the necessary arrangements for a comfortable retirement are in our own hands. Knowing how to plan effectively at as early a stage as possible is critical if you want to achieve the retirement you are dreaming of.

At Financial Architects, we can help you plan for your retirement. Our expert financial advisers can help you prepare for the big day by offering sound financial advice that will pave the way towards a long and happy retirement, after all, you deserve it.

Why not call us today, it is never too early or late to begin planning.

Financial Architects Ltd t/a Financial Architects is Regulated by the Central Bank Of Ireland.