Every month your pension contributions slip out of your account without much thought, and once a year a statement arrives with a figure beside your name. That figure tells you what your fund is worth today. What it does not tell you is the thing you most want to know: how much money will actually land in your account each month once you stop working?
If that question leaves you guessing, you are in good company. A major new piece of Irish research points to this exact uncertainty as the biggest obstacle standing between people and a confident retirement.
The New Retirement Reality, published in 2026 by Amárach Research on behalf of FPSB Ireland, IOB, LIA and the Retirement Planning Council of Ireland, put questions to 1,200 working adults. The headline conclusion is hard to ignore: Irish workers are contributing to pensions, yet they have little idea what those contributions will eventually buy them.
The figures lay it bare. Among employees with a pension, 35% admit they do not understand their company scheme, and 45% say retirement planning as a whole is a mystery to them. The sharpest contrast sits at the heart of the data: 74% feel on top of their everyday finances, but 79% feel unprepared for retirement and 52% fear their money will run dry.
The researchers gave this gap a name, the Retirement Confidence Paradox. People who handle a monthly budget without breaking a sweat seize up the moment the timeframe stretches to decades. The shortfall, the report argues, is not effort or willingness. It is clarity.
A pension statement hands you a single figure, and a single figure is remarkably difficult to plan around. €400,000 looks comfortable on paper, but comfortable for which lifestyle, lasting how many years, beginning at what age? Without those answers, the number floats free of any real decision.
The report’s recommendation is grounded and doable. Inside an hour, it suggests, you can pull up your most recent statement, work out what it translates to as a monthly income at the age you hope to retire, write down the lifestyle you are aiming for, and check whether one covers the other. Converting the pot into a monthly figure is the step nearly everyone leaves out, and it is precisely where understanding starts.
So how does that conversion work in practice here in Ireland?
At retirement you can generally take a slice of your pension as a tax-free lump sum, usually up to 25% of the fund. The first €200,000 is free of tax, and the next €300,000 is taxed at the standard 20% rate. The balance you are left with after that is what goes on to generate your monthly income.
From there, two main routes exist, and most people sit the State Pension alongside one or both of them.
For the majority, the State Pension (Contributory) is the floor everything else stands on. From January 2026 the maximum personal rate is €299.30 a week, which works out at roughly €15,564 a year, payable from age 66 (you can now defer to age 70 in exchange for a higher rate). Because it is not means-tested, it sits steadily beneath whatever your private arrangement delivers. The catch is that it seldom stretches to the retirement people picture for themselves, which is exactly why the private fund carries the weight.
An annuity trades your fund for a guaranteed income that lasts the rest of your life. You hand over the capital and receive a fixed income in return, no matter how long you live or what markets get up to. Rates in 2026 are in noticeably better shape than they were across the low-interest stretch of the 2010s. As an illustration only, a single-life annuity might return somewhere around 5% a year, so a €250,000 fund could deliver in the region of €12,500 a year, guaranteed. You are buying certainty and giving up flexibility, and the rate quoted to you will reflect your age, your health and the options you select.
An Approved Retirement Fund (ARF) leaves your money invested and lets you draw from it as your needs dictate. The appeal is flexibility, the prospect of further growth, and the fact that whatever remains can pass to your family. Two details are worth holding on to. The first is that the old Approved Minimum Retirement Fund (AMRF) restriction, which once locked away part of your money until age 75, has been scrapped, so an ARF now gives you full access to your fund. The second is that Revenue sets a minimum you must withdraw each year whether you need it or not: 4% from age 61, rising to 5% from age 71, and 6% on funds above €2 million. Flexibility cuts both ways, though. Draw too hard, or run into weak markets in the early years, and an ARF can empty.
Plenty of people combine the two, leaning on an annuity to lock down the essentials and an ARF for flexibility above that, with the State Pension holding everything up from below. There is no universally right answer, only the one that fits your circumstances.
The report treats retirement readiness as a process rather than a single date in the diary, and the opening step in that process is knowing your income. Skip it and the major questions stay stuck: when can you actually afford to finish, will you get to retire when you hoped, will the money go the distance? Half of those surveyed expect to carry on working past retirement age purely for the income, and 51% wish they had started planning sooner. Getting clarity today is what keeps you from working longer tomorrow out of need rather than choice.
The encouraging part is that turning a statement into a clear monthly income figure is a problem with a solution. It simply takes the right guidance.
At Riordan Financial we help clients turn pension savings into a clear, realistic view of their retirement income. We advise across the full range of options, from Annuities and Approved Retirement Funds to Company and Personal Pensions, so the route you settle on genuinely fits the life you want.
If you would like to know what your pension will actually pay you each month, contact Riordan Financial for a review. Visit riordanfinancial.ie to learn more.
This article is for general information only and does not constitute financial advice. Tax treatment depends on individual circumstances and may change. Figures are correct as of 2026. Riordan Financial Brokers Ltd trading as Riordan Financial (C30375) is regulated by the Central Bank of Ireland.
