A common question that we are asked by new clients is, “how much money do I need to retire?”
It is a question with no straightforward answer, as the amount of money needed depends on a variety of factors, such as your lifestyle expectations, health, and the cost of living. However, there are some general guidelines that can help you get started in calculating your retirement savings goals.
Reflect on your lifestyle expectations and goals
Firstly, you need to consider what you want out of life and how you wish to spend it. This in turn, helps you to work out how much capital and income you will need to support your retirement lifestyle. For example, if you’re planning to travel extensively or pursue expensive hobbies, you may need more money.
You will need to work out how much it costs or will cost you to maintain your desired standard of living. Everything you spend your money on should be calculated so you can obtain an accurate assessment of how much you planned lifestyle will cost.
Do the calculations
Once you have a rough estimate of your retirement needs, you’ll need to determine how much you’ll need to save to achieve that goal. This will depend on a few factors, such as your current age, the age you plan to retire, and your current savings and investments.
To get a rough estimate, you can use a retirement calculator, which can help you estimate how much you’ll need to save each month to reach your retirement savings goal.
For example, if you’re 40 years old and plan to retire at age 65, and you’ll need £30,000 per year in retirement income, you may need to save around £800 per month, assuming an annual return of 6% on your investments.
It’s important to note that retirement calculators are just estimates, and you may need to adjust your savings goals based on changes in your financial situation or lifestyle expectations.
What next?
Determining how much money you need to retire is a complex process that requires careful consideration of your lifestyle expectations, the cost of living, and your savings goals. However, by taking the time to plan and research your options, you can help ensure a financially secure retirement.
If you would like to discuss your pension options and start planning your retirement, please do get in touch with us by telephone on 02920 782330 or via email at theteam@uniqfamilywealth.co.uk. Our lines are manned Monday-Thursday, as we operate a four-day working week.
