One of the questions we commonly get asked when we start working with somebody is “how much money will I need in order to retire?”
The short answer is, “it depends”.

It’s natural to want to have a concrete figure in mind to work towards, but as much as we would love to be able to give you one, there are many factors that influence the answer. Every client is different, and therefore so are their goals.

It’s all about you

At the start of your journey to financial freedom, we spend time getting to know you. What are your goals for the future? What are the things that matter most to you? Is there anything that you want to start or stop doing?

This part isn’t just for fun. As much as we truly enjoy getting to know our clients, there’s a purpose behind all the questions at the start. Your answers will help us to build a picture of the lifestyle you want to enjoy and, therefore, how much it might cost to maintain that lifestyle. Factor in a few big spends (a once-in-a-lifetime holiday, a house extension, or paying for your daughter’s wedding), think about the legacy you want to leave, account for inflation and the number of years you need your money to last, and voila – you have your “magic number”.

When that figure is first calculated, it may seem large and insurmountable. However, remember that this figure represents at least 20 years of living expenses and experiences.
Not only that, but with the right strategy in place, it’s perfectly achievable.

But what about a ballpark figure?

Whilst no two clients are alike, and therefore no two ‘magic numbers’ are the same, there are some rough figures out there that have been published by researching bodies. However, it’s important to note that these figures are just guidelines and make a lot of assumptions. Your personal circumstances, including your desired lifestyle, health, housing situation, and other financial commitments, will all impact how much money you personally need in retirement.

Call us ambitious, but we don’t want to just settle for getting you a “comfortable” retirement – we want you to have a brilliant retirement. In next month’s newsletter, we’ll break down what this might look like as an example.

How do I get there?

If handled correctly, your money will grow over time. Assuming you started pension contributions early in your career, you have the benefit of time on your side to compound the returns on your pension.

By working with a financial planner, you will have a team of experts in your corner designing the perfect investment and savings strategy to get you where you need to be. Get in touch if you want to discuss your plan.