The insights in this article are based on research from The Prime Retirement Index by the Financial Planning Standards Board, which sets out clear, evidence-based benchmarks for retirement planning.
One of the biggest uncertainties people face is whether they are saving enough for retirement. You might know your current pension balance. You might even know roughly what you contribute each month. But how do you know if you are actually on track?
The Prime Retirement Index answers that question in a refreshingly practical way. Instead of vague targets, it provides a simple framework built around salary multiples at key life stages.
The Core Target: 11 times your Final Salary
At the centre of the Index is a clear objective. To maintain your standard of living in retirement, you should aim to accumulate a pension pot worth around 11 times your final salary by age 65.
This target is based on a 4 percent annual drawdown rate in retirement. In simple terms, if you withdraw 4 percent of your pension fund each year, your savings are structured to provide a sustainable income over the long term.
For example, someone retiring on a salary of €50,000 would aim for a pension pot of €550,000. A 4 percent drawdown from that fund provides €22,000 per year. When combined with the State Pension, total retirement income would be approximately €37,000, equating to a replacement rate of roughly 74 percent of final salary.
At higher salary levels, the required fund increases accordingly. A €75,000 salary requires around €825,000. A €100,000 salary requires approximately €1.1 million. Replacement rates are lower at higher incomes because the State Pension represents a smaller proportion of earnings.
The important point is that the 11 times figure is not random. It is calculated to support a meaningful retirement income that broadly protects your lifestyle.
What you should have saved at each age
While the 11 times target applies at retirement, the Prime Retirement Index breaks this down into milestones along the way. These age based benchmarks provide a clear way to check your progress.
The recommended salary multiples are:
By age 35: 1 times your salary
By age 45: 3 times your salary
By age 55: 7 times your salary
- By age 65: 11 times your salary
These figures act as guideposts. If you are 35 and have built a pension pot equal to your annual salary, you are broadly on track. If you are 45 and have three times salary accumulated, you are moving in the right direction. By 55, the expectation increases significantly because time is shorter and the pension fund must now carry more of the future income burden.
The framework effectively divides retirement planning into clear stages: early career, mid career, pre retirement and retirement. At each stage, the required savings multiple increases.
Why the jump feels steep in your fifties
Many people are surprised at how sharply the target rises between 45 and 55. Moving from three times salary to seven times salary in a decade can feel daunting.
The reason lies in the concept of human capital versus financial capital.
In your twenties and thirties, your greatest asset is not your pension pot. It is your future earning power. You may have relatively modest savings, but you have decades of income ahead of you. That future income has value.
As you move into your forties and fifties, the balance changes. Your remaining working years shrink. Your pension fund must grow to compensate for the gradual loss of earning power. By the time you reach retirement, your financial capital must fully replace your employment income.
That is why the savings curve accelerates later in life. It reflects the mathematical reality of having less time for contributions and compounding to work.
The role of investment returns
Reaching 11 times salary is not simply a matter of adding up contributions. Long term investment returns play a crucial role.
For those who start early, a significant portion of the final pension pot comes from market growth rather than direct contributions. Compounding allows returns to generate further returns over time. The earlier you begin, the more powerful this effect becomes.
Delaying pension saving often means having to contribute significantly larger amounts later, because you have less time for growth to do the heavy lifting.
The impact of tax relief
Tax relief is another major driver of pension outcomes. Age related contribution limits allow you to increase the percentage of income you can contribute as you get older. For higher rate taxpayers in particular, pension contributions can benefit from substantial tax relief.
In practical terms, this means that every euro contributed does not always cost a euro from your take home pay. The tax system effectively boosts your contribution, enhancing the long term value of your pension.
Used strategically, tax relief can materially improve your path towards the 11 times salary target.
The State Pension gap
The research also highlights an important structural issue. Over the past 25 years, State Pension increases have not kept pace with wage growth. While the State Pension has risen, average wages have grown at a significantly faster rate.
This creates a widening gap between what people earn during their working lives and what the State provides in retirement. For middle and higher earners especially, private pension provision becomes essential to maintain living standards.
The 11 times salary framework recognises this gap and builds a private savings target around it.
How to check where you stand
Working out whether you are on track is straightforward.
First, identify your current pension fund value.
Second, note your current annual salary.
Third, divide your pension pot by your salary.
The result is your salary multiple.
Compare that multiple to the benchmark for your age. If you are above the target, you are broadly in the safe zone, assuming you continue contributing consistently. If you are below, it may be time to adjust your contribution rate, review your investment strategy or reassess your retirement timeline.
Importantly, being below target does not mean it is too late. It simply means that action now can have a meaningful impact.
A framework, not a reason to panic
It is important to view the 11 times salary target as an ideal world benchmark rather than a pass or fail test.
In reality, most people do not begin their pension journey with a clean slate at age 25 and perfectly consistent contributions every year thereafter. Life happens. House deposits, mortgages, childcare, career breaks and unexpected expenses all compete for attention. For many, serious pension saving only begins in their thirties or even forties.
If the conversation focuses only on reaching 11 times salary at retirement, it can feel overwhelming, particularly for those starting later. And when a goal feels out of reach, the risk is that people delay taking action altogether.
The real value of the Prime Retirement Index is not in demanding perfection. It is in providing direction. Even if 11 times salary represents an optimal outcome, moving from zero to one times salary is meaningful progress. Increasing from two times to three times salary still improves future income security. Every step forward matters.
The key message is this: starting, even imperfectly, is far more powerful than waiting for the “perfect” moment. A tailored plan built around your real life, not an idealised model, is what ultimately drives better retirement outcomes.
Take control of your retirement plan
If you are unsure whether you are on track, or if you would like a tailored strategy to reach a comfortable pension target, now is the right time to seek professional advice.
Riordan Financial can provide a personalised pension review, assess your current salary multiple and build a clear, practical roadmap towards your retirement goals. Whether you are in your thirties and just starting to build momentum, or in your fifties and refining your strategy, expert guidance can make a significant difference.
Contact Riordan Financial today to arrange a retirement planning consultation and take confident control of your financial future.