When Enda Kenny retires at the next general election, he’s in line to get a lump sum of €378,000 and an annual pension of €126,000, equating to a capital value of c. €3 million.

Enda Kenny’s pension is linked to his salary and service. Kenny has been a TD since the mid 70’s, served as a government minister on a few occasions, and more recently Taoiseach. Because of these factors, his defined benefit (DB) pension is explainable.

DB schemes insulate members from stock market volatility, longevity risk and provide for a spouses pension on death. It’s the gold plate standard of pensions.

But it’s unlikely you are as fortunate when funding for your retirement. Every year that goes by you get closer to retirement, and potentially further away from your retirement goals.

Before you start to get dismayed – console yourself with the knowledge that for many ordinary Irish citizens, that kind of pension is not possible. There are restrictions as to how much we mere mortals can contribute and in fact it becomes tax inefficient to fund a pension over €2 million.

Still feeling inadequate? OK, what if I were to say it’s just a number, or the number doesn’t matter?

Managing cash-flow is king

Do you need a fund worth €3 million on retirement? I can’t see how Enda Kenny does, but then again, I know little about his wider financial affairs. Maybe you’ll win the lottery.

How much money is available to you to invest, save or spend is an abstract concept – just an arbitrary number – until you know what you need from it.

That’s why when a stranger asks me how much they need to put away for retirement, my answer is usually vague on first response. This is not my attempt to be evasive, but when we know what your objective is, then we can answer that question.

If you know what your fund needs to stretch to, we can work out your number and plan accordingly. 

Don’t put this off any longer. Get in touch if you’d like to know more.