Almost half of people in Ireland expect their 60s to be the most expensive time of their retirement, new data shows.
The survey carried out by Royal London Ireland reveals that 38% believe they will need the most money in their 70s, while just 17% think their 80s and 90s will be the costliest time.
“On the one hand, how much we’ll need for our retirement years could be anyone’s guess – as none of us know for sure what lies ahead,” said Mark Reilly, Pension Proposition Lead with Royal London Ireland.
“However, by looking at our current financial situation, and what provisions, if any, we have put in place, and by considering the “common” expenditure associated with later years in life, then we could all make an educated guess as to what we need to budget for in retirement,” he added.
The number of people who think their 90s will be the most expensive period ranged from zero to just 3%, depending on the age of respondent.
“While it’s possible that not everyone sees themselves living into their 80s and 90s, increased longevity means more are doing so,” Mr Reilly said.
“We are living longer and we are hitting key milestones later in life, so people really need to understand how all of this will impact them financially in the future,” he added.
The Cost of Retirement
Royal London Ireland has set out some costs that people might expect in retirement, depending on their individual situation.
Nursing home fees: Weekly fees could range from anything to about €1,000 to almost €3,000, meaning that in some cases, the annual cost of a stay in a nursing home could be as much as €150,000 plus.
Mortgage: A recent study by Royal London Ireland found that almost three in ten homeowners expect to be still paying off their mortgage in their retirement years, while 8% expect to be continuing to do so into their seventies. As the average mortgage drawn down by first-time buyers is now €282,084, repaying a mortgage into retirement could be a substantial financial strain.
Healthcare costs: This could include health insurance premiums (which for some could be more than €390 a month or €4,700 a year), to GPs appointments (which could cost anything from €45 to €70 per visit if you don’t qualify for a GP visit card), to regular prescriptions, to more expensive treatments like a mastectomy, spinal fusion surgery, heart surgery, prostatectomy, and treatment for depression.
Day-to-day cost of living: Such as fuel; food and utilities. For example, if you live in a typical three-bedroomed house, the average annual electricity bill on a standard tariff is €1,763 while the average annual gas bill on a standard tariff is €1,466.
Discretionary spending: This will vary vastly from person to person but could include travel (nearly half of pre-retirees intend to travel in their later years, according to the Retirement Planning Council of Ireland), taking up new hobbies, or embarking on further education.
Dependants: The average age of mothers giving birth in Ireland is at its highest point since records began and the number of Irish women giving birth at the age of 40 and over is about a third higher than it was in 2011. This means that many people in retirement could still be supporting their children. The cost to a parent of supporting a child to buy their first home could prove substantial. Four in ten first-time buyers (FTB) received a parental gift towards their house deposit, according to recent figures. The average FTB mortgage is now €282,084. Third-level education fees could also need to be covered – it currently costs €56,376 to send one child to college for four years.
Article Source – 45% say their 60s will be the costliest decade of retirement – RTE
