What is the Cost of a Comfortable Retirement?

If you are thinking about the future, and life after work, you may be wondering how much you will need for a comfortable retirement. It is in fact a common question, “How much money should you have to retire comfortably?” Working out how much money you will need to do the things you’ve always dreamt can actually be a fairly straightforward exercise.

How much money you need to retire comfortably is subjective, and is directly related to the type of lifestyle you aspire to living when you finish work, the age you intend to retire, and whether you will receive the full state pension amount.

The Retirement Living Standards is an initiative launched by the Pensions and Lifetime Savings Association (PLSA). Based on independent research by Loughborough University, the Standards have been developed to help people picture what kind of lifestyle they could have in retirement.

By showing what life in retirement looks like at three different levels – minimum, moderate and comfortable – you can see how your future may pan out based on your income and expenditure.

What is a comfortable retirement?

In terms of a ‘comfortable retirement’, the Retirement Living Standards describes this as, ‘more financial freedom and some luxuries’, with couples needing around £47,500 per year to enjoy life at that level. For single retirees, the annual income for a comfortable retirement needs to be in the region of £30,000. These figures increase for those living in London to £49,000 and £36,000 respectively.

Luxuries may include three weeks’ holiday in Europe each year, regular beauty treatments and leisure trips.

The Standards are a good start to help savers see a clearer picture of how their lives may look in retirement. One of their aims is to help people develop their own personal targets, so that they can start planning based on their specific circumstances.

How much money should you have to retire comfortably?

Assuming you qualify for the full state pension, currently £9,339 per year, the PLSA suggests that a pension post of at least just under £600,000 will be required to achieve a retirement that can be considered comfortable, that is if you are planning to use your pension as an annuity and take a guaranteed annual income.

Of course, every situation is different and for this reason, it is vital, and the Pensions and Lifetime Savings Association agrees, that independent financial advice forms part of any retirement planning strategy.

It may be that you have grander plans for your retirement and, rather than a comfortable life, you actually have your sights set on more of a luxury one. This may include, for example, frequent and extended holidays, health club or gym memberships, regular new car purchases and lots of social and leisure activities.

Looking to plan for a comfortable retirement? Start by taking independent financial 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.

Courtesy of our in-house team of legal, financial and tax experts, we are also able to provide advice on wills and estate planning so that our clients have access to a complete range of helpful, associated guidance.

If you would like to start looking at how you could achieve the retirement of your dreams, why not get in touch with our friendly team, and arrange your no-obligation complimentary consultation?