Pension math: Delaying savings by ten years multiplies monthly costs

Delaying the start of pension contributions by ten years increases the required monthly payment by more than 80 percent, according to new analysis from wealth management firm Goodbody.

The data reveals that reaching a specific retirement target becomes exponentially more expensive as the start date moves later. The firm calculated the exact monthly amounts needed to secure a fund of €1,225,000. This sum provides an annual income of €50,000 for nearly 25 years.

A person beginning to invest at age 26 needs to contribute €799 per month. If the same person waits until age 36, the monthly contribution rises to €1,466. Starting at age 46 pushes the monthly cost to €2,968. These figures represent an 83 percent increase and a 271 percent increase, respectively, compared to the baseline age of 26.

The gap widens dramatically for those starting in their mid-fifties. Reaching the same €1,225,000 target at age 56 requires a monthly contribution of €7,865. This amount is nearly ten times higher than the contribution needed if savings began at age 26.

Michelle O’Keefe, head of wealth advisory at Goodbody, noted that later starts are common but do not mean individuals should stop saving. “Every decade brings new priorities, but a later start isn’t a reason to switch off. This is a reminder that it’s never too late to start, and that every year you act makes the goal easier to reach,” O’Keefe said.

Goodbody also released research on the saving habits of Irish women. The survey, conducted by Red C in September, polled more than 600 women. It was published just before the official announcement of a new personal investment account scheme in Budget 2027. Those accounts are scheduled to become available in July of next year.

The study found a disconnect between interest in investing and actual action. Up to 77 percent of women in their 20s expressed interest but did not know where to begin. Only 46 percent of respondents felt confident in assessing investment risks and returns, even though 76 percent reported feeling confident managing their personal finances independently.