The Early Retirement Dream
Retiring at 60 instead of 66 sounds amazing. Six extra years of freedom. But there's a catch: the Irish state pension doesn't kick in until 66.
That means you need to fund those 6 years yourself. Let's break down what it actually takes.
The Gap Years (60-66)
If you retire at 60, you need private income for 6 full years before the state pension starts.
Annual expenses of €35,000?
- 6 years × €35,000 = €210,000 extra needed
Annual expenses of €40,000?
- 6 years × €40,000 = €240,000 extra needed
This is on TOP of your normal retirement fund.
Two Strategies for Early Retirement
Strategy 1: The Bridge Fund
Save a separate pot specifically for ages 60-66:
- Target: 6× your annual expenses
- Keep it in accessible assets (not locked in pension)
- Draw it down during the gap years
Strategy 2: A Bigger Overall Fund
Simply save more so your 4% withdrawal covers everything:
- Instead of €700k, you might need €900k-€1M
- Your overall fund needs to last from 60 to ~90
- That's 30 years, so consider a 3.5% withdrawal rate
The Math for Retiring at 60
Example: Single person, €35k/year expenses
Option A (Bridge Fund):
- Age 60-66: €210,000 bridge fund
- Age 66+: €500,000 investment portfolio
- Total needed: €710,000
Option B (Bigger Fund):
- 30-year retirement at 3.5% withdrawal rate
- €35,000 / 0.035 = €1,000,000
- (State pension reduces this to ~€550,000 after 66)
Access to Pensions at 60
Good news: Most Irish pensions are accessible from age 50 (with employer agreement) or 60 (standard early retirement).
Bad news: Early access often means reduced benefits:
- Fewer years of contributions
- Potential reduction in annuity rates
- Tax implications of larger withdrawals
Is It Realistic?
Here's what you'd need to save monthly from different starting ages:
Target: €900,000 by age 60
- Starting at 30 (30 years): €1,100/month
- Starting at 35 (25 years): €1,550/month
- Starting at 40 (20 years): €2,300/month
- Starting at 45 (15 years): €3,700/month
These are significant amounts. But with employer matching and compound growth, they're achievable for higher earners.
The "Coast FIRE" Alternative
Can't save enough to fully retire at 60? Consider "Coast FIRE":
- Save aggressively until 50
- Let your investments compound to 60
- Work part-time or in lower-stress roles from 50-60
- Full retirement at 60
This reduces burnout while still hitting your number.
Learn more about FIRE strategies in What is FIRE? Financial Independence Retire Early Explained.
Not sure if you're on track for early retirement? Check Am I On Track for Retirement? for age-based benchmarks.
Your Next Steps
- Take the free quiz to see your current projected retirement age
- Calculate your specific gap funding needs
- Consider whether partial early retirement makes sense
- Review your pension access options
Wondering if early retirement is possible for you? Check your numbers with our free calculator.