How much money do I need to retire?

How Much Do You Need to Retire? It Depends—Here’s Why

The earlier you start retirement planning, the better. However, with the demands of managing a busy working and personal life, this is something that can understandably be neglected. But it’s never too late to think about saving for retirement – even if you are planning to give up work in just a few years’ time, you will have options to add to your nest egg.

How to plan for retirement

People planning for retirement should think hard about what they want to do when they eventually stop work. It is helpful to have a good idea of the lifestyle you want, how much it will cost and how you are going to pay for it.

With so much going on in your life – from family and work to pursuing your passions – retirement planning may not have been your priority. But now you want to make sure your pension and overall financial situation will allow you to keep up your current lifestyle. The more enthusiastic you are about retiring, the more likely you are to develop a robust retirement plan.

When it comes to retirement planning, there are a lot of things to consider. First and foremost, you need to make sure that you have enough saved up to cover your costs. This includes things like living expenses, health and care costs, and any other debts or financial obligations you may have.

You also need to think about how you want to spend your retirement years. Do you want to travel? Spend time with family and friends? Pursue hobbies or interests?

Whatever you want to do, it’s important to have a plan in place so that you can make the most of your golden years.

Last but not least, don’t forget to factor in inflation when planning for your retirement. Over time, the cost of living will go up as we’ve seen recently, so you’ll need to make sure that your savings can keep pace with rising prices.

By planning ahead and taking all of these factors into consideration, you can look forward to a comfortable and enjoyable retirement.

Retirement statistics

• 53% do not know how much new retirees receive with a full State Pension
• Only 34% of married people understand how to ensure their spouse will be left with enough pension if they die
• 8 million people are planning a DIY approach to retirement and do not know how to avoid running out of money, avoiding a big tax bill or leaving an inheritance
• 22% planning to retire in the next five years do not know about the product options at retirement
• 35% of pension holders know nothing about how stock market falls can affect retirement savings
• Only 39% of pension holders are planning on taking financial advice when they retire, with 31% planning to DIY their retirement

Financial decision making

Obtaining advice compensates for the emotional biases people have when they make big financial decisions. A DIY approach to managing large pension funds at retirement is fraught with risk.

People can easily buy the wrong products, incur unnecessary tax bills or simply exhaust their retirement funds too quickly, whereas a Financial Advisor will provide an impartial, cool-headed approach to their client’s finances and offer solutions that the client will not even have considered.

Important information

This blog is for general information only and does not constitute advice. We recommend you speak to your financial adviser before making any decisions. The information is aimed at retail clients only.

No statements or representations made in the article are legally binding upon Shackleton Advisers Limited or the recipient.

All references to taxation are in relation to UK taxation and are based on our current understanding of UK laws and HMRC practices. Tax reliefs may change in the future and may not be maintained. Tax treatment is based on your individual circumstances. All other information is based on our understanding of current legislation and regulation which may be subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits.

The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.