Brain Phrye

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[ originally from a facebook and linkedin post ]

I posted this on facebook, but someone pointed out it might be better here. And since I’ve never really posted here [ LinkedIn ] I thought I would. Note that it mainly applies to people who work and live in Ireland, but there’s also general advice that applies to other places. This article is by no-means expert advice and if you have suggestions for improvements I am all ears.

I’m not a big career planner. I work on stuff I find interesting and just go with that. Luckily those things have paid well because I’m also not big on budgeting or long term financial planning. But I do listen to advice so I’ve always put money in retirement plans and made sure to invest windfalls into longer-term assets like a pension or property. But when I hit 40 I realised I should try to come up with a longer-term plan.

Without really consciously deciding to, this year has apparently been the year I did that (I’m nearly 44, so there was some procrastination involved). It started late last year with finally organising all my private Irish pensions (2 from employers, 1 personal). In the process I learned the following:

Additionally in the past few months I learned about the Irish state pension. The big thing is that it’s changing. If you are 68 after 2020 the rules have changed - and they’re now much simpler. Work for 10 years and you get the minimum state pension (13 of a full pension). Work for 20, you get 23 of of a state pension. Work for 30, you get a full pension. But you can’t collect it till you’re 68 and remember that Irish employers can apparently force you to “retire” at 65 (ageism is legal). So you need to bridge those 3 years (or hope they change the law to stop employers from doing that).

When I “retired” I kept a part time job for a number of reasons, but one was because I suspected I needed more PRSI credits for a pension. And it turns out this was correct. Part-time work counts as long as you make more than €38/week. And self-employment counts as long as you make more than €5,000/year. You can also make voluntary PRSI contributions (around €500/year but very situation dependent).

If you’ve worked in Europe or the US or Canada or a few other countries, you can get credits for social welfare payments in those countries. But if you have enough here and you have enough for some pension in the other country, you can draw a pension from both.

Lastly most people I’ve talked to about retirement this year (and through my working life really) have used the analogy of legs on a stool. Every source of post-retirement income is a leg on the stool - the more legs, the more secure your retirement. There are lots of options for legs:

You don’t need to sort it all out tomorrow. This all plays out over decades. All you need to do is chip away at it. If you’re organised you might do it at a specific time each year (birthday, new year, labour day, etc) or if you’re like me just whack at it randomly when you feel like you’ve ignored it too long. Just don’t feel like it all has to be solved in one go. In fact due to changes in society and economies it’s almost impossible to do that - ten years from now there might be new legs for your retirement stool and some existing legs might be better/worse than they are now.

Some reference articles: