Act now and ‘get a head start’ on figuring out how much money you’ll need in retirement.
Britons have been told to start calculating how much pension they would need for retirement as soon as possible. Knowing how much one will require is essential for efficiently planning one’s post-working life. Of course, the amount required depends on the type of retirement lifestyle desired. Calculating how much money is needed can be difficult, but fortunately, there are several websites available that have already done the hard work for you.
The Pensions and Lifetime Savings Association (PLSA) has released their Retirement Living Standards to help people navigate the complexities of retirement preparation. The Standards provide thorough information on the types of retirement lifestyles available to retirees, divided into three tiers: minimal, moderate, and comfortable.
A single retiree will need £10,200 per year to qualify for the minimal category, while a pair will need £15,700. This provides for all of one’s retirement needs, plus some money left over for fun.
A single retiree needs £20,200 and a couple needs £29,100 to qualify for the moderate tier, which provides more financial flexibility and stability.
Finally, for a single retiree and a couple, the comfortable category demands £33,000 and £47,500, respectively. This amount allows for even more financial flexibility, as well as more room for pleasures.
Naturally, these categories will not apply to everyone, but they can be used as a guideline when planning for the future and thinking about retirement.
Vanguard’s chief of financial planners, James Norton, spoke with This website on how to best plan for retirement. “The first step in determining how much money you’ll need to retire is to think about your retirement goals,” he added.
“A lot of factors come into play here, including your lifestyle, retirement age, and other sources of retirement income. It’s also worth mentioning that most people spend less in retirement than they do now, typically between 50 and 85 percent of their current consumption.
“This is because when individuals cease working, they usually have lower expenses,” he noted. “One method to account for this is to consider your current expenses and subtract any that you will not have in retirement.
“For instance, you may have paid off your mortgage and will no longer be commuting to work.
“After that, you can just add in any additional expenses.”Brinkwire Summary News”.