How long before you retire? You can choose

How long before you retire? You can choose

“HOW long will it take?”

“What do you mean, how long will it take?”

“Before I can stop.”

“Before you can stop?”


“I’m not sure – do you want to stop now?”

“Oh God, I do, I don’t think I will be able to keep getting out of bed in the morning – do you know what I mean?”

“To be honest, I don’t. What the hell are you talking about?”

This was the beginning of a conversation I had with a gentleman in the toilet of the Strand Hotel in Limerick city last week.

We were both at the urinals and as he turned to me and started off the conversation I couldnt figure out where he was going. Was it some sort of a game he played with others in hotel toilets? How long will it take for me to finish peeing?

As I tried to speed myself up and get out of there, he elaborated – and started to make sense.

“How long will it take before I can stop working? I read your piece in the Leader a couple of weeks ago about retiring and I was wondering how long more I would have to work.”

“Oh right,” I said. “Sorry, I didn’t know what you were talking about there for a second.”

I slowed my pace and eased the pressure I had been putting on my kidneys.

It was a good question, one on the minds of many people and I am glad he read the article and that it got him thinking about when he could stop working.

I had some time to spare so the two of us, went up to the bar and had a cup of coffee. We started chatting about when he could indeed stop working.

I told him that the secret to giving up work and being able to retire is based on one simple factor: the amount you save each month as a percentage of your take-home income.

And your savings rate is determined by two things; how much your net salary is each year and how much of that you can live on.

So, as soon as you have enough income to pay for your monthly outgoings, you are ready to give up work and retire.

If, for example, you spend 100% of your current income, you will never be able to retire – mission impossible. I mean, how could you? Unless someone else is directly or indirectly saving for you i.e. inheritance from family, state pension etc, your working career will be never ending.

If you are spending 0% of your income (for some unknown reason you can live for free or off nothing) you can stop working and retire right now.

These last two examples are a bit extreme so let’s look at some other ones for you.

These figures assume things like, your savings earn 5% net of inflation each year, you withdraw 4% of your savings fund each year, your retirement spending is going to mimic your spending during your working years and you want your savings to outlive you.

Based on all of the above, here is how many years you will have to work for, depending on what percentage of your income you save:

Savings rate

Years you have to work until you retire


85 years


66 years


56 years


51 years


43 years


28 years


22 years


10 years

What’s interesting is if you save for example, 5% of your current annual outgoings, you will need to work for about 66 years. But if you were able to reduce your outgoings and use those savings to boost the amount you save to 10%, then you will be able to retire 15 years earlier.

As I wrote previously, cutting your spending can be much more effective and realistic than increasing your income or savings. It increases the amount of money you can save each month and it permanently decreases the amount you will need each month for the rest of your life

Most financial advisers will encourage people to save at least 10% of their income each year and whilst this is an excellent figure, unfortunately it means the person is going to be working for a long time – up to 51 years.

Many people struggle to save even 10% because when you factor in mortgage repayments, rent, transportation, childcare costs, food, utilities and so on, not much is left over; therefore focusing on outgoings and reducing them by as much as you can is so important.

If you want to put a timeframe on how long you will have to work before you can retire, you now know what needs to be done.

I met a couple some months ago and between them, they had an annual income of €65,000. If they were to save 8% of their income, it would take 56 years before they could stop working. But, if they were able to live off just one income and save 50% of their combined salary, then in 17 years they would be done – that’s a difference of 39 years. Was it possible of them?

Don’t think so – 50% might be too much of a stretch but 30% might not be. Showing people the difference between what will happen and what could happen motivates them into doing something because they just need to know what impact their hard work and sacrifices will have on their future. So, this article is for John, the man I met in the toilet in the Strand last week, who told me after we finished talking that this information was valuable. He said it might be a bit late for him, but not for his son.

Liam Croke is MD of Harmonics Financial Ltd,

based in Plassey. He can be contacted at or

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