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What Would It Cost For Me To Have a €1,000,000 Pension Fund By 68?

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Sep 02

The odds of winning the Irish Lotto are 1 in 10,737,573 while the odds of winning the Euromillions are 1 in 139,838,160.

It doesn’t cost much to play the lottery because the lottery companies make their profits by matching large, enticing jackpots with statistically improbable outcomes.

Building €1,000,000 in a pension fund on the other hand, will cost you a lot more each month but your odds of success are far greater.

Chance or Choice?

Successful investing relies on sound principles, consistency of action and long-term discipline while a lottery win relies solely on luck.

It’s great to be lucky in life but it’s not a reliable investment strategy since you have no control over it.

So, when we talk about pension investing, you should know that there are 3 factors that determine your final outcome and you have a significant degree of influence over each of them;

1) The Age You Start Investing
2) The Amount You Save Each Month
3) The Level of Investment Growth You Get.

Pension Planning

€1,000,000 is a big goal to have but having one is the starting point of any retirement plan because then you can work out what’s needed to achieve it.

So, if you’d like to retire as a pension millionaire by 68,  then here is the net monthly cost of doing so.

Note: All figures are displayed using 3 alternative rates of net annual growth (i.e.  3.75%,  5%  &  6.25%) which are for illustration purposes only and are net of tax relief at the marginal rate within the limits of age and salary.

Net Monthly Cost of a €1,000,000 Pension by 68

    • Age 18:  €354 @ 3.75%,  €239  @ 5% or  €158  @ 6.25%
    • Age 19:  €370  @ 3.75%,  €252 @ 5% or  €169 @ 6.25%
    • Age 20:  €386 @ 3.75%,  €266 @ 5% or  €180 @ 6.25%
    • Age 21:  €404 @ 3.75%,  €281 @ 5% or  €192 @ 6.25%
    • Age 22:  €422 @ 3.75%,  €296 @ 5% or  €205 @ 6.25%
    • Age 23:  €442 @ 3.75%,  €313 @ 5% or  €218 @ 6.25%
    • Age 24:  €463 @ 3.75%,  €331 @ 5% or  €233 @ 6.25%
    • Age 25:  €485 @ 3.75%,  €350 @ 5% or  €249 @ 6.25%
    • Age 26:  €508 @ 3.75%,  €370 @ 5% or  €266 @ 6.25%
    • Age 27:  €532 @ 3.75%,  €391 @ 5% or  €284 @ 6.25%
    • Age 28:  €558 @ 3.75%,  €414 @ 5% or  €303 @ 6.25%
    • Age 29:  €585 @ 3.75%,  €438 @ 5% or  €324 @ 6.25%
    • Age 30:  €615 @ 3.75%,  €464 @ 5% or  €347 @ 6.25%
    • Age 31:  €646 @ 3.75%,  €492 @ 5% or  €371 @ 6.25%
    • Age 32:  €679 @ 3.75%,  €522 @ 5% or  €397 @ 6.25%
    • Age 33:  €714 @ 3.75%,  €554 @ 5% or  €425 @ 6.25%
    • Age 34:  €751 @ 3.75%,  €588 @ 5% or  €456 @ 6.25%
    • Age 35:  €791 @ 3.75%,  €625 @ 5% or  €489 @ 6.25%
    • Age 36:  €834 @ 3.75%,  €664 @ 5% or  €524 @ 6.25%
    • Age 37:  €880 @ 3.75%,  €707 @ 5% or  €563 @ 6.25%
    • Age 38:  €929 @ 3.75%,  €753 @ 5% or  €605 @ 6.25%
    • Age 39:  €982 @ 3.75%,  €802 @ 5% or  €651 @ 6.25%
    • Age 40:  €1,040 @ 3.75%,  €856 @ 5% or  €701 @ 6.25%
    • Age 41:  €1,102 @ 3.75%,  €915 @ 5% or  €755 @ 6.25%
    • Age 42:  €1,169 @ 3.75%,  €978 @ 5% or  €814 @ 6.25%
    • Age 43:  €1,242 @ 3.75%,  €1,048 @ 5% or  €880 @ 6.25%
    • Age 44:  €1,321 @ 3.75%,  €1,124 @ 5% or  €951 @ 6.25%
    • Age 45:  €1,408 @ 3.75%,  €1,207 @ 5% or  €1,031 @ 6.25%
    • Age 46:  €1,503 @ 3.75%,  €1,299 @ 5% or  €1,118 @ 6.25%
    • Age 47:  €1,607 @ 3.75%,  €1,400 @ 5% or  €1,215 @ 6.25%
    • Age 48:  €1,723 @ 3.75%,  €1,512 @ 5% or  €1,323 @ 6.25%
    • Age 49:  €1,852 @ 3.75%,  €1,637 @ 5% or  €1,444 @ 6.25%
    • Age 50:  €1,995 @ 3.75%,  €1,777 @ 5% or  €1,580 @ 6.25%
    • Age 51:  €2,156 @ 3.75%,  €1,935 @ 5% or  €1,733 @ 6.25%
    • Age 52:  €2,337 @ 3.75%,  €2,113 @ 5% or  €1,908 @ 6.25%
    • Age 53:  €2,317 @ 5% or  €2,108 @ 6.25%
    • Age 54:  €2,338 @ 6.25%

Don’t worry, I will be following this up with a similar post looking at the monthly cost of achieving the €400,000 tax-free pension option as an alternative.

This is the one that would give you €100,000 as a tax free lump sum along with €3,000 of tax free income each month with your state pension.

It’s an ideal alternative which you can read more about here.

Remember, getting started is the hardest part of any plan so if you’re still stuck at the starting line then give me a call on (01) 442 9329 or email me at kevin@thepensionstore.ie and you could be up and running by next month.

You can see your options here.

Kevin

2019 All-Ireland Business All-Star for Pensions

 

 

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