Brain Phrye

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Retirement Revisit

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A further update to my original and updated retirement posts.

Since I last wrote on this topic I chatted with two pension plan advisors in the course of setting up my company pension. One interesting thing I learned is that for the best tax benefit for an Irish pension, the goal is a €800,000 pension account. You can withdraw 25% tax-free up to a maximum of €200,000.

As a US citizen who is also subject to US taxes - which do not recognise 25% tax-free withdrawals of pension funds, I’m not clear what the consequences are. I suspect I’d end up needing to pay US taxes on all of that. However because my pensions are not consolidated, if I trigger the pensions over several years I might be able to avoid the issue.

Getting the answer to “am I saving the right amount” is really frustrating. Along the way I’ve found a few good retirement calculators. One lets me key in a pretty good description of how I expect my retirement to work. The other is an interesting way to play out how your retirement would survive a series of historical scenarios. Better still would be one that combines elements of both of those with Monte Carlo simulations. Might be an interesting holiday project.

One last bit was determining my spending. I’m still not clear on what my annual spend would be. I have estimates but I’d really like to compare it to actual data. One tool I found interesting was a minimum expenditure calculator. It puts the income floor at €15k.