Do you know how much money you will need at retirement?
Our free retirement calculator helps you estimate how much you may have in your pension when you retire and whether that can provide the income you want.
Enter your current age, planned retirement age, pension savings, monthly contributions, and the retirement income you would like. The calculator then projects how your pension could grow and estimates how long your money could last in retirement.
This can help you answer an important question: am I currently saving enough for the retirement I want?
The result is an illustration rather than a guarantee, because investment returns, inflation, pension contributions and your retirement needs can all change.
How much should I have in my pension pot when I retire?
There is no single pension pot that suits everyone for retirement. The amount you need depends on when you want to retire, how much income you want, how long your retirement lasts, what other income you will receive, and how your pension is invested.
Someone planning to retire at 60 with a high annual income will have very different requirements from someone retiring at 68 with a lower income and a full State Pension.
This is why a retirement calculator is useful as a starting point. Rather than relying on a general rule of thumb, you can enter your own circumstances and see how your projected pension compares with your retirement goal.
What does the calculator show?
The calculator gives you an estimate of the pension you could have when you reach your chosen retirement age. It also shows how long your projected pension could last if you withdraw the retirement income you have entered.
Your result is based on assumptions about investment growth, fees, inflation and how long your retirement lasts. The calculator currently uses an investment growth assumption of 5.3% after fees and a target based on an assumed life expectancy of 100.
These assumptions are deliberately simplified. Actual investment returns will vary from year to year, inflation may be higher or lower than expected, and you may live for longer or shorter than the assumption used by the calculator.
For that reason, the result should be treated as an illustration rather than a prediction of what will happen.
What if I am not on track for retirement?
If the calculator suggests that you may not have enough to achieve your desired retirement income, there are several factors that can be considered.
For example, you could explore:
- increasing your pension contributions
- increasing employer contributions where available
- delaying your planned retirement date
- reducing your desired retirement income
- making additional one-off pension contributions
- reviewing the investment strategy and charges associated with your pension
- considering how the State Pension or other savings may contribute to your retirement income
The right approach depends on your circumstances. A calculation showing that you are currently off track does not necessarily mean that you need to make a large change immediately.
Equally, being shown as “on track” does not mean that your retirement income is guaranteed.
Why is retirement planning important?
Retirement planning is about more than building the largest possible pension pot. You also need to think about when you want to retire, how much you will need to spend, how you will take income from your pension and how your other assets and sources of income fit together.
Your circumstances can also change over time. You may change jobs, increase or reduce your pension contributions, retire earlier or later than planned, or change the level of income you want in retirement.
For this reason, it can be useful to revisit your retirement plan regularly rather than treating a single calculation as a final answer.
Should I speak to a financial adviser about retirement planning?
A pension calculator can be a useful starting point, but it cannot consider every aspect of your financial circumstances. Planning your retirement involves decisions that go beyond estimating the size of your pension pot.
A regulated financial adviser can help you assess the wider picture. They can help you understand how your pension fits together with your other savings, investments, property and sources of income, and how different choices could affect the retirement you want.
If you would like help turning your retirement plans into a clear financial strategy, you can use the Trusted Advisor adviser matching service to find a regulated financial adviser suited to your needs. Alternatively, email our team at hello@trusted-advisor.co.uk and we can help you understand the next steps.