This is sure to calm your concerns, even if only a little bit.
I get asked this question more than any other, and rightfully so:
How much money do I need to retire and am I saving enough for retirement?
The answer, of course, Is never that simple. There are many factors that come into play, including how much you think you will spend, how much State Pension you expect to receive, your health and life expectancy, and at what age you expect to retire, to mention just a few.
Typically, for most people that we work with, we have discovered that most people need to accumulate savings of around 15 to 25 times their current annual income. To illustrate this, let’s assume the midpoint of 20x. On that basis, it would seem that someone earning £40,000 a year would need to accumulate £800,000.
That’s a shocking amount, right?
But do you really to accumulate that much? If you’re married and will receive combined State Pension benefits of around £16,000 a year, you won’t need to accumulate enough savings to generate that entire £40,000. Instead, you’ll need only £24,000. And 20 times that is just £480,000 — a goal that’s is not as hard to achieve.
If you have other pensions, such as defined benefit pensions (Final Salary schemes) in addition to your State Pension, that target amount may be even less. And furthermore, it could be less still, if you plan on earning part-time income after you retire; even £10,000 a year can make a massive difference.
In addition to that, you may decide that you can afford to live on less than what you’re currently spending.
For all these reasons, the situation might not be nearly as difficult as you think.
So, that range of 15x to 25x is just a guide — a range. To get your specific answer to that important question — Am I saving enough for retirement? — there is no substitute for consulting a professional financial planner. Reviewing your situation, will help you understand what you need to accumulate in savings so that you can retire.
Are you concerned about your retirement plans? Not sure where you now and if you are on track?
Contact us to today. We can review your current situation and let you know what options are available to you.
If you would like to talk to about financial planning, please get in touch for a no-obligation meeting. Go to our website www.miadvice.co.uk and contact us via our “Get in touch” form on our home page or Contact Martin Dodd on 01902 742221.
Email us at firstname.lastname@example.org
It is advisable to take advice from a professional financial adviser when making major financial planning decisions.
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This article has been prepared in good faith and based on Midlands Investment Agency’s understanding of the law and interpretation thereof at the time of creation. The contents should not be regarded as specific advice and we always recommend that specific advice is sort from a qualified professional. No responsibility can be accepted by Martin Dodd or Midlands Investment Agency Ltd., for any loss that may occur by a person acting or refraining from acting on the basis of this article.