How much money do you really need to retire?

It’s the burning question on the top of so many tongues – ‘when can I retire?’

The answer is both a simple one, and a more complicated one because essentially, you can probably retire a lot earlier than you anticipate, but it really depends on the type of lifestyle you would like to enjoy once you do.

Choosing when to stop working is a very personal thing. There is no magic age when retirement suddenly becomes possible or a magic figure that’s the same for everyone, but you should consider what YOU want your retirement to look like and build a solid plan around that.

  • Where will you be saving money once you retire?
  • Where will you be spending money once you retire?
  • How much income will you receive once you retire?

What are you likely to spend during your retirement?

Some costs will go up; others will decrease. A good starting point it to consider your current spending. It might sound obvious, but a lot of people actually have very little idea what their weekly, monthly and annual outgoings actually are. Look through a few months of bank and credit card statements but consider that different times of year come with different expenditure. Christmas time is likely to be more expensive for example, although on the flip side, you might spend more money going out and enjoying things during the summer months. This is why it is so important to look at your lifestyle and your desires specifically.

Actually, can you retire now?


…or at least make a few changes in the lead up to it.

If you evaluate things and find that you actually already have enough money in the bank to live out the lifestyle you desire, then do you really need to keep working, just so that you can say you worked until retirement age? Conversely, if you don’t yet have enough to achieve your goals then does that automatically mean you have to work longer than you had thought? Not necessarily – while looking at how much you have is a great starting point, there’s a lot more to it than this. Investment planning comes in many forms, and they can vary depending on the level of risk that you are comfortable with. It may be that you can invest in different areas, over longer periods of time with a view to receiving a potentially greater sum of money in the longer term, but it could put a bit of a hold on things in the shorter term. It may also be though, that if you are happy to invest in some higher risk activities, you can actually work a day less each week and start enjoying some of the things you would like to do early. Putting that scenario into the mix, do you even want to retire all at once? Would you prefer to possibly work a little longer, but reduce your days and have more flexibility to enjoy the things you would like to do now?

Our clients know exactly what they are being charged and the level of service they will receive for the remuneration we receive. This may sound obvious but unfortunately, the history of financial services has meant that this hasn’t always been the case. We are committed to ensuring that our clients have a full understanding and appreciation of the work we do and how this translates into good value for them.

Cutting to the chase – when CAN you retire?

Without knowing what you would like to do during your retirement, we can’t possibly determine how much money you will need. Once we know though, then a firm plan can be put in place. As life centred financial planners we work with you to evaluate what you would like to do during your retirement, and how you envisage your future playing out. We will sit down with you, determine what it is you would really like from life in the short, medium and long-term, and then we will build a solid plan around that.

Traditional retirement planning was arguably based more around saving as much as you possibly could until the age of, say, 65, and then figuring out what you wanted to do once you stopped working, but that’s not an approach we favour. Our lifestyle financial planning approach focuses on the ‘what’ and ‘why’ aspects of your retirement as we believe that’s by far the most reliable way to determine the ‘when.’

Don’t be fooled into thinking there is a set age to retire, or a set figure to make it possible. The reality is that it’s a personal question with a very individual set of answers that are all about you.

Speak to us about what you would like your future to look like post-retirement, and we will help you formulate a plan to move your vision from dream to reality.

This article does not constitute financial advice and should not be construed as such.