In my job as a financial planner, I answer big and expensive questions, such as:
“Will we have enough money?”
To those I don’t know, my standard answer is: “it depends”
Obviously, it depends on your lifestyle. The more extravagant the lifestyle you lead, the bigger the number you need.
Reading this, you might  think “well I don’t have an extravagant lifestyle”. And that may well be true, but we all have a minimum level of lifestyle we will accept.
Anybody reading this could probably give up work tomorrow, sell everything they own and buy a one-way ticket to remotest Africa where they would live off the land in a small village without running water or electricity. You’d probably be the richest person in the village.
But does it appeal?
We’ve become used to comforts in life that we perhaps take for granted and we want to retain the things we’ve always had. And that includes running water!
So, what does a good lifestyle look like and what does it cost?
According to the Pensions and Lifetime Savings Association , their Retirement Living Standards estimates that a single person needs ÂŁ31,300 a year after tax to afford a moderate lifestyle in retirement. They break down their estimate into expenditure categories like food, clothes, transport, holidays and leisure defining what those costs could be individually.
Extending the estimate to a couple who can share costs, increases the amount needed to ÂŁ43,100 a year.
You can even compare lifestyles so if you’re more M&S than Morrisons or more Skiathos than Skegness then you’ll need £43,100 a year (£59,000 a year if you’re a couple) to enjoy a comfortable lifestyle in retirement.
For many people, their state pensions will be their foundation of income and will go some way towards meeting these costs. For those retiring today, the maximum state pension is £11,502.40 per annum or £221.20 each week.  Income above that comes from you either through any pension funds you’ve built up over your working life or from other savings.
So, will you have enough money?
Figuring out your financial future can be challenging but knowing the sort of lifestyle you’ll need to fund is a great starting point. Use the Retirement Living Standards as your guide to help you think more deeply about what you might need.
If you want to talk more about this, just get in touch.
