Weekend Economists Take a Shot in the Dark, September 28-30, 2012

[xchrom]

13. Increase in pension age 'is just the start'

http://www.irishtimes.com/newspaper/finance/2012/0928/1224324535454.html

RECENT MOVES to increase the retirement age are only the start of the process, a conference heard yesterday. People could find themselves working well into their 70s in order to secure a 50 per cent pension, Aisling Kennedy, an actuary with Swiss Re, said.

Addressing a Society of Actuaries in Ireland pensions conference, she said: “The recent increase in the pension age [to 68 on a phased basis by 2028] is a start. But more increases will be needed.”

She cited the example of a worker aged 25, who, with his employer, put 15 per cent of his salary into a pension fund consistently over his working life. If he was hoping to retire on half his final salary he would be working until 73 years of age.

In order to retire at 65 pension contributions would need to equal a quarter of gross salary consistently through the working life.