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Retirement Options

What is the Retirement Age in Ireland?

January 23, 2023

Retirement is an important milestone in life. At the end of our working years, many of us will be looking forward to the freedom and relaxation that comes with retirement. In Ireland there are a range of rules and regulations that govern the retirement age. The basic rule of thumb is that people are generally eligible to retire at 66 and begin receiving their State Pension. However, there are other factors that can affect when you choose to retire such as the type of employment contract you have, the extent of activities or travelling you wish to do in your retirement, or other personal and family commitments. The Government of Ireland has established a range of measures to help those retiring, including pension credits, tax breaks and financial incentives for employers who support their employees’ retirement plans

With this blog post we will explore Ireland's laws surrounding the age of retirement and look at some of the options available to those who wish to continue working past the general retirement age or take advantage of early pensions schemes. Finally, we'll discuss the Pensions Commission set up by the Irish government in 2020 and what changes it could bring about in Ireland’s current system. Additionally, it is important to remember that retirement is an ever-changing landscape, and everyone's situation is unique. It is of the utmost importance to speak with a financial advisor or pension provider to make sure you understand your rights, entitlements and options when approaching retirement. This can help ensure that you are making the best decisions for your long-term financial well-being.


Choosing Retirement

Retirement is a major decision and should not be taken lightly. It can have far reaching implications on your financial future, including changes to taxation rules, pensions entitlements, access to State benefits and other schemes. Ireland’s default retirement age is set at 66 but there are various options available if you wish to work beyond this age or retire earlier. The most important thing to remember is that to retire comfortably and live out your twilight years in the way you wish, a strong, concise financial plan is of paramount importance. Making smart decisions in the lead up to retirement can help set you up with a comprehensive financial safety net once you make the decision to retire. This involves taking into consideration a range of factors such as savings, investments, and debt. It is important to consider all avenues when planning for your retirement, from pension schemes and state benefits to private investments and other financial products.

Some lines of work may have a mandatory retirement age. Certain public sector occupations for example, members of the Garda Síochána must retire by the age of 60. The subject of mandatory retirement of employees has been a thorny issue for a number of years now with much of the discourse surrounding the key question of whether or not placing increased pressure on a longer working life is beneficial to one's health and wellbeing. Ireland has seen some changes in this area recently with the introduction of laws that allow employees aged 66 or over to continue working if they choose. It is important to understand the terms of your employment and check any contracts of employment for clauses relating to retirement. Bringing this information to an experienced financial advisor such as those of us here at FitzGerald Flynn can give a clearer picture of your retirement options and help you make the most of your golden years.

Working in the Public Sector

Whether you work in the private or public sector will also have an impact on your retirement age and furthermore the range of choices available to you. If you happen to be a public sector worker, the age of your retirement is contingent upon when you first entered the public service. If you were recruited prior to April 1, 2004 and did not reach the formerly established retirement age of 65 before December 26, 2018, you now must retire at 70 years old as set out in the Public Service Superannuation (Age of Retirement) Act 2018. However, if you were employed between the 1st of April, 2004 and the 31st of December, 2012 there is no compulsory retirement age you must abide by. If you joined the public service after 1 January 2013, the minimum retirement age is 66 in line with the State Contributory and Non-Contributory Pension, and the mandatory retirement age is 70. You can keep working right up until the age of seventy, if you meet both medical and physical conditions.

There are, as previously mentioned, some occupations where the statutory age is less than 70 years old, such as the Garda Síochána who must retire by 60. Members of the force who have joined after 2004 can decide to retire as soon as they turn 55 years old. Fire Service personnel must step down from their post by the age of 55. Those retained, however, have a chance to request an extension until 58 provided that they fill out all necessary paperwork and pass a medical exam.


Working in Retirement

As Ireland's population continues to age, there is an increased demand for people who are willing to stay in the workforce beyond 66. This could be due to a range of factors such as financial necessity or simply wanting something constructive and fulfilling to do with their time. Many retirees find that working part-time or on a contract basis helps them meet financial needs and keeps them engaged in life. The government provides various options to those who wish to continue working past retirement age through pension credits, tax breaks and additional incentives for employers. The pension system has seen a number of changes over the last decade, with Ireland now enjoying one of Europe's most generous pensions and retirement schemes but that lifestyle may not be for everyone.


Pensions Commission

The Pensions Commission was established in Ireland to review the retirement system and make recommendations for changes. The commission has been focused on increasing the number of people preparing financially for retirement, as well as making pension schemes more accessible and attractive. One commitment of the commission was to "Examine how private sector employment contracts specifying retirement ages below the State Pension Age may be impacting on the State’s finances and pension system".

One recommendation that has come out of the commission is a change to Ireland's state pension age. Currently, Ireland's state pension age is 66 years old, although the commission has proposed a gradual increase to 68 over the course of the next 17 years. The conclusions drawn by the findings within the Pension Commissions report will potentially influence many areas of Irish law for years to come and thus affect the financial planning and strategies of those approaching retirement. The future of Ireland's retirement age may be uncertain, but what is certain is that it pays to plan for the future and consider all options available now.

In Conclusion

It is important to remember that determining your retirement age is only one part of your overall financial health and planning. It is also important to consider other investments, such as savings and investments, in order to ensure long-term security and financial stability during retirement. While retirement is an important milestone, it’s also important to remember that there are many other ways to remain active and engaged in your later life. Retirement should be approached as a new chapter of life, not an end point. There are many opportunities for volunteering, learning new skills or pursuing hobbies that can bring pleasure and fulfilment beyond the traditional retirement age.

Ireland's system of pensions and retirement age can be complex and in a seemingly constant state of flux, but making sure you are aware of the options available to you is the best way to ensure financial security. By understanding Ireland’s retirement laws, we at FitzGerald Flynn can help our clients make decisions about when or if to retire and what kind of pension arrangements may be most beneficial. Contact us today to find out more.


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