Irish workers need to bank an extra €9,100 a year to financially survive retirement, a report on the pensions timebomb said today.
A study has uncovered a €20.2bn black hole in the amount of money being saved for life after 65.
Insurance firm Aviva warned that only workers in the UK and Germany are in a worse financial position for their retirement plans.
Its European study found 20-year-olds in Ireland face an average gap of €1,700 a year in retirement savings and up to €21,100 for 60-year-olds.
Aviva warned that Britons are facing a deficit of €12,300 per person and Germans €11,600.
Jim Dowdall, Aviva Ireland chief executive, said: “Closing this gap can be achieved by a combination of factors, such as increased savings, raising the retirement age or indeed adjusting our expectations for our lifestyle in retirement.”
Mr Dowdall urged government and the insurance industry to come together to develop a stronger retirement savings culture.
“We need to ensure a widespread understanding of the scale of the problem, and encourage individual responsibility to tackle it,” he said.
“A practical combined public sector/private sector approach to tackling the issue has become imperative.”
Aviva warned that by 2051 half the Irish population will be 65 or over – three times as many as now.
It said unless people put more money away for retirement they will have to accept working later into life, taking on jobs during their retirement or having a reduced standard of living.