How much retirement income is enough?

Everyone has different wants and needs in retirement, so everyone will require different amounts of money. It’s worth checking out The Retirement Living Standards from Pensions UK. These can help you understand what your costs might look like depending on whether you have a minimum, moderate and comfortable lifestyle in retirement.

For example, a moderate lifestyle might cost £31,700 a year for a one-person household. To achieve this lifestyle, Pensions UK estimate you might need a pension plan worth £330,000-£490,000 (*see assumptions below). This assumes that you’re using your plan to buy an annuity, which is a product that gives you a guaranteed income for life. It also assumes you’re receiving the full new State Pension, which people can only start claiming at 66, rising to 67 by 2028.

Based on UK research, the average pension wealth for any age group (including over-55s, who can start taking their money) is less than £330,000. That means ‘average’ won’t necessarily be enough for people who want a moderate lifestyle. You can find out more about the Retirement Living Standards estimates online.

There are other ways to take your money besides buying an annuity. For example, you can take a flexible income (drawdown), where you choose how much money you take and when. But if you were to withdraw too much too soon, you could run out. Some people take their money in a combination of ways. You can find out more about the options on MoneyHelper.

The most important thing to think about is you. So do check how much you’re likely to need for your own goals. Then you can work out if you’re on track for the life you want. Synergi can help you by conducting a full financial review including looking into your income needs in retirement and how you save sufficient capital to achieve your goals -Contact info@synergi-europe.com

*Rounded illustrative indicative figures based on annuity rates ranging from £5,000 to £7,500 per £100,000. Rates vary according to the type of product and saver circumstances including location and health. Provided as an illustration only, annuity rates change frequently.