Wemustplantomake retirement affordable

WHETHER you subscribe to notions of a cosmic order or not, one thing that is absolutely certain is that if you don’t plan for your future there is a price to pay. Ultimately everyone has to retire from something, but having something to retire on is no longer guaranteed.

Now Social Protection Minister Regina Doherty is considering proposals to reform pensions through a consultation process. There is little to take comfort from in some of the harsh realities we are being forced to confront. Like it or not, we are facing the retirement age being pushed out to 68 and this begs a few searching questions. If people have to retire at 65, will they be caught in a poverty trap for the next three years as they will only be eligible for the dole?

Yet from both policy and budgetary perspectives the pensions time bomb must be defused. Therefore notions of a total contributions approach, whereby an individual’s pension will be proportionate to the contributions they make, is probably inevitable. This might finally address current inequities by taking into account periods spent in child-rearing, or full-time caring. We are still very much in the consultation phase and eventually a report will be submitted.

The contours of the final model have yet to be agreed by Government. Sometimes, in order for things to stay the same, change is inevitable. With an ageing population, securing the State pension has to be a priority. A lack of vision as opposed to a lack of money could cost us more in the long run. Yet there is no escaping from the fact that workers must also set aside funds to cushion the impact of retirement on income.