How much money will you need in retirement?

When you retire you’ll probably have different needs than you have now. What’s important today may well have changed by the time you retire. Some areas you should consider are:

• The effects of inflation – you could live many years in retirement. You may prefer your income to increase, keeping pace with inflation, and this will cost you more. 
• The state of your health – can you expect to remain healthy in retirement? What is your family history? Do you smoke? Generally, if your lifestyle or health is such that it may shorten your life, you could get a higher income.
• You’ve probably arranged to pay off your mortgage by the time you retire, so you’ll be free of one of your main outgoings. You could ‘trade down’ by moving to a smaller property – this could give you a healthy lump sum to invest.
• Your children are likely to be financially independent and have left home. You may have grandchildren. Your parents and your partner’s parents may still be alive and need your help. As you get older, you might need more help yourself.
• You might want to spend more time on your hobbies, or take up a new one. You may want to take more holidays or go travelling.
• Your property still needs maintaining and your car still requires insuring and servicing. You may need to save for these bills and other items like family celebrations and special occasions.

To help make sure you have enough money when you retire, you should start planning now.

Take a look at our pension plans and speak to your adviser about pension planning.