How Much do I need to Retire at 60?

A common question asked of us is, “how much do I need to retire at 60?”

It’s a widely shared goal, because most people at 60 still lead an active life. Many are keen to spend more time with their families, to travel and to have the freedom to do the things they’ve been unable to do due to work commitments.

If this is also a dream you have, you’ll no doubt be wondering, “how much do I need to retire?”, and that’s precisely what we’ll explore in this post.

How much income do I need if I want to retire comfortably at 60?

Retirement income isn’t necessarily limited to your private pension pot. You may have a State Pension, as well as savings and investments and perhaps income from a rental property that you can rely on to fund your retirement.

If your aim is to retire at 60, then the general rule is that you will need around 20-25 times your annual retirement expenses. So for example, if you spend £25,000 per year, then you will need a retirement fund of £500,000 – £625,000.

The key thing is how much you will spend.

How to calculate your expenditure in retirement?

Start by working out your regular household expenses, including your weekly food shop and anything you would normally spend on travel, clothing and leisure pursuits.

Think about whether your expenditure will drop in retirement, for example if you no longer need to commute.

You’ll also need to factor in additional expenses. Many people plan to travel more or take up new hobbies in retirement, perhaps buy a new car.

If you’re uncertain as to how much you might spend, it is useful to apply the 70 per cent rule. This states that the average retiree needs 70 per cent of their normal working income.

Where will your retirement income come from?

Once you have an idea of what you might spend in retirement, it’s time to look at your potential income.

As we’ve already touched upon, this will come from two main sources, those being income, and capital.

Retirement income

Income in retirement is anything that is a regular source of funds. This could include a final salary pension, a State Pension, dividends from any company in which you hold shares, interest from savings and any rental income.

You can obtain an estimate of the income you’ll receive from your State Pension online.

It may be that you have various sources of income that commence at different times. Your State Pension may not begin for example until you are 66 or 67, and any final salary pensions may not start paying out until you are 65. So, if you want to retire at 60, you will need to have another form of income to tide you over until you are eligible for your respective pensions.


Capital includes savings, investments and pensions. These are funds from which you can withdraw money as you need it so as to top up your retirement income.

Do proceed with caution, however, when accessing your capital, because if you draw too much, you could run out of money.

If you wish to retire at 60, you will usually be able to withdraw around 4 per cent of your capital each year, but this will vary depending on the source of the capital and prevailing interest rates and returns.

What if you don’t have enough money to retire at 60?

If your calculations have revealed that you won’t have enough to retire at 60, there are various solutions.

You could try to save more each year leading up to your 60th birthday, or spend a little less. You could also try to rearrange your investments to secure a better return. A professional, independent investment management service will help you get more out of your investments.

You could also look into the possibility of taking your final salary pension early, although it is vital to thoroughly consider that there may be disadvantages in doing so. Finally, you could think about pushing your retirement back a few years until you have the funds available for the comfortable retirement you have been anticipating.

How to retire at 60 without running out of money?

There is only one way to guarantee you won’t run out of money in retirement, and that is to purchase an annuity. This will provide you with a guaranteed income for life. However, the income will usually be quite small, unless you have a considerable pension pot.

An alternative is to flexibly drawdown an income from your pension pot. This makes it possible to take as much or as little as you wish, whenever you need it. This method is not without risk, however, as if you withdraw too much, you will run down your pension.

Looking to find out how much you need to retire at 60? Take independent advice from the specialist retirement planners at PMW.

At Partridge Muir & Warren, we have been advising individuals and couples on their retirement options for more than 50 years. Our advice is independent, widely trusted and totally focused on the best interests and personal goals of our clients.

If you would like to start looking at whether you can retire at 60, why not get in touch with our friendly retirement planning team, and arrange your no-obligation complimentary consultation?