{"id":391405,"date":"2025-09-02T08:15:11","date_gmt":"2025-09-02T08:15:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/391405\/"},"modified":"2025-09-02T08:15:11","modified_gmt":"2025-09-02T08:15:11","slug":"want-to-retire-early-in-ireland-these-are-five-habits-of-people-that-do-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/391405\/","title":{"rendered":"Want to retire early in Ireland? These are five habits of people that do \u2013 The Irish Times"},"content":{"rendered":"

Who wouldn\u2019t like to pack in the day job<\/a> and head off on extended holidays at home or abroad, spend more time with family, or in the garden?<\/p>\n

The problem is, finishing up work earlier than the mandated age of 65\/66 is not easy, given that it inevitably means smaller pensions and longer life expectancy in retirement<\/a>. So, it requires careful planning. After all, leaving your job at 55 may mean funding yourself for a further 40 years. <\/p>\n

Here are some common traits financial advisers say those who do achieve it share.<\/p>\n

1: They\u2019re switched on<\/b><\/p>\n

Do you know how much is in your pension<\/a> and how it is invested? How much of your eligible tax relief for retirement savings you\u2019re using? What term is left on your mortgage<\/a> and what rate you\u2019re paying? What return you\u2019re earning on your savings and investments?<\/p>\n

These are simple things, but if you\u2019re going to give up work early you need to have a clear view on your finances.<\/p>\n

\u201cBeing switched on when you\u2019re younger is massively helpful,\u201d says Michael Cunningham, managing director of GSB Capital Ireland.<\/p>\n

It also helps you to recognise periods in your life when you can \u201cgo for it\u201d and bump up pension contributions as well as those more expensive times when simply making any pension contribution is enough.<\/p>\n

Some people take this awareness to extreme levels \u2013 the Fire (financial independence, retire early) movement<\/a>, for example, is about living frugally in order to save as much as you can for an early retirement. But more of us will try to look to a bit of canny saving without forgoing all luxuries in life. <\/p>\n

\u201cThey have all their money working for them,\u201d says Colin Hudson, a certified financial planner with Bray-based Opes Financial Planning, of these canny people, adding that maximising pension contributions is a \u201cno-brainer\u201d due to tax relief.<\/p>\n

[\u00a0Four things you\u2019ll love about being in your 50s in Ireland \u2013 and one you won\u2019tOpens in new window<\/a>\u00a0]<\/p>\n

They also keep a firm eye on how their pension and other investments are performing.<\/p>\n

\u201cThe most important thing of all is being in the right investment fund. There are lots of poor ones in the default space,\u201d says Cunningham, adding that you can often get a better return without taking on more risk by picking the right fund.<\/p>\n

\u201cYou might be up 6 per cent a year and think that\u2019s great but if everyone else is getting 9 per cent, it\u2019s not so good,\u201d says Cunningham.<\/p>\n

So don\u2019t just go for default options \u2013 pick what suits you best. \u201cYou need to tailor everything in life.\u201d <\/p>\n

2: They don\u2019t overpay their mortgage, or not exclusively so<\/b><\/p>\n

For many homeowners, the comfort that comes from overpaying their mortgage is priceless. But doing so may not be the best financial decision. And it might even make retiring early that bit more difficult.<\/p>\n

\u201cIf your mortgage rate is less than 5 per cent, then people shouldn\u2019t really rush to overpay,\u201d says Cunningham. <\/p>\n

After all, markets typically return more on an annual basis \u2013 since 1957 the S&P 500 has been averaging annual returns of about 10.4 per cent, for example. <\/p>\n

Not only that, but you could also be leaving tax relief on the table by putting your money into your mortgage rather than your pension. And it could offer your pension fund the rocket fuel it needs to be able to support you for a longer period of time. <\/p>\n

\u201cIt\u2019s a balancing act of life,\u201d says Cunningham. <\/p>\n

3: They model their future financial needs<\/b><\/p>\n

If you\u2019re thinking of stopping work early, you\u2019re going to need to plan a roadmap \u2013 and this means working out your future financial needs. <\/p>\n

\u201cYou can\u2019t really make any decision without modelling what expenses are coming in, and when, and what your current assets are worth,\u201d says Hudson, adding that many people may be paying into a pension, but \u201cthey don\u2019t really know what income is coming down the line\u201d.<\/p>\n

And staying somewhat flexible is also important.<\/p>\n

\u201cIt\u2019s always a goal for a lot of people but you do see those goalposts move a bit as they get closer to retirement,\u201d says Hudson, adding that this is typically because people underestimate how much they spend.<\/p>\n

\u201cThey think their living costs are less than their means,\u201d he adds, but when expenses such as travel, home renovations and helping children out with house deposits are factored in, \u201cpension pots are stretched much more than they thought\u201d.<\/p>\n

Inflation can also hurt, as can being over-optimistic.<\/p>\n

\u201cPeople can also overestimate how much their pension will return,\u201d says Hudson.<\/p>\n

[\u00a0Half a million euro for a \u2018moderate\u2019 retirement? The lump sums you need to saveOpens in new window<\/a>\u00a0]<\/p>\n

Bear in mind also that the early years of retirement may be some of the more expensive, given typical desires to go travelling, etc, <\/p>\n

For some in their 50s or early 60s, a redundancy package on offer from their employer might precipitate the decision to take early retirement. But with this, too, you\u2019ve got to do the sums to make sure you have enough to last you until your pension kicks in.<\/p>\n

\u201c<\/b>You\u2019ve got to do your modelling to make sure it\u2019s sustainable,\u201d says Cunningham. \u201cYou might find that you\u2019re not in a bad position to retire early, but maybe you should work another two or three years to improve it.\u201d<\/p>\n

It\u2019s also good to keep a couple of options in your back pocket, such as downsizing.<\/p>\n

\u201cWe find people think about it but in practice not many people actually do it,\u201d says Hudson, adding that it can be a plan B for people in the future, if they need to release cash.<\/p>\n

4: They might bank on still working a bit<\/b><\/p>\n

Where once, early retirement typically meant walking off into the sunset with a lump sum and a defined-benefit pension, which all but guaranteed a few months in the sun every year type of retirement, the landscape has significantly shifted these days.<\/p>\n

\u201cEarly retirement is not the same as it was for our parents,\u201d says 40-something Cunningham.<\/p>\n

A reliance on defined-contribution pensions where the retirement income depends on the investment performance of what you put into the fund rather than the traditional defined-benefit pension which paid up to a half or two-thirds of your final salary depending on years of service, means closing the financial gap is going to be trickier.<\/p>\n

For many, early retirement is really about starting to taper down the amount they work, rather than stopping altogether. That may mean dropping from five days to three, for example, or doing consultancy work.<\/p>\n

This may be needed in the early years. If you take retirement at 60, for example, and are waiting for the State pension to kick in at 66, \u201cthere can be a period there, when pension pots can be depleted quite rapidly\u201d.<\/p>\n

\u201cWe tend to see the first seven or eight years as being quite expensive \u2013 and then again, later in life, due to long-term care costs,\u201d says Hudson.<\/p>\n

Many early retirees will look to keep working even after they give up their day job. This could be on an ad hoc basis, such as consultancy or freelance work, or even part-time work in a new industry. <\/p>\n

Bearing this in mind, if you want to give up full-time work earlier than the State pension age, start thinking about some kind of work to which you can transfer your skills.<\/p>\n

This might also mean you will be keeping your PRSI record active as you move towards State pension age. Remember, you will generally need 40 years of contributions to qualify for a full State pension. <\/p>\n

If you are aged under 66, you will be paying PRSI at Class S (4.1 per cent) on all your withdrawals from any approved retirement fund (ARF) into which you have moved your occupational pension on early retirement, provided you draw down at least \u20ac5,000 a year. This can also help towards your State pension record.<\/p>\n

5: They have flexible pension products<\/b><\/p>\n

You\u2019re going to need to know your difference between a PRB, a PRSA and an ARF if you want to plan effectively for an early retirement. <\/p>\n

This is because you can access certain pension products only at certain ages. So it\u2019s \u201cmassively important\u201d to understand how the various pension products work, says Hudson.<\/p>\n

You can start drawing down a PRSA (personal retirement savings account), for example, only from the age of 60, but a personal retirement bond (PRB) can be accessed from age 50.<\/p>\n

\u201cThe \u2018go to\u2019 for clients we find is the PRB,\u201d says Cunningham, adding that \u201chaving a few different pots is really attractive\u201d.<\/p>\n

[\u00a0Approved retirement funds: What is an ARF and how much will it cost me?Opens in new window<\/a>\u00a0]<\/p>\n

It can also make sense from a tax planning perspective, as drawing down enough to keep you under the higher income tax rate (currently \u20ac44,000 for a single person) may make sense. <\/p>\n

While you might find it cumbersome keeping several different pension pots in play in the years running up to retirement, remember that once you access them, your funds will most likely move into one approved retirement fund (ARF).<\/p>\n

A PRSA can be used to split into different pots \u2013 some of which you might be able to access from the age of 50, if you\u2019ve retired. It also means that you can tailor investment strategies to when you are going to draw them down \u2013 taking more risk in the longer-term pots, for example. <\/p>\n

It\u2019s also important if you dream of moving abroad.<\/p>\n

\u201cIf someone is thinking of moving abroad, it\u2019s really important that they\u2019re in the right pension structure,\u201d says Hudson, noting that some products, such as PRSAs, cannot be moved overseas.<\/p>\n","protected":false},"excerpt":{"rendered":"Who wouldn\u2019t like to pack in the day job and head off on extended holidays at home or…\n","protected":false},"author":2,"featured_media":391406,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,3713,2074,2499,2250,16,15,596],"class_list":{"0":"post-391405","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-mortgage","11":"tag-pension","12":"tag-personal-finance","13":"tag-retirement","14":"tag-uk","15":"tag-united-kingdom","16":"tag-work"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115133712031761753","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/391405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=391405"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/391405\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/391406"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=391405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=391405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=391405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}