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How much will I need to retire?

The answers to most financial planning questions could and should be simple.

Financial planning struggles with a surfeit of complication. I believe our regulator (understandably paranoid) should shoulder some responsibility.

But the practitioners are the main culprits.

Apparently “complexity sells” – if you confuse someone enough, they will pay good money to be deconfused.

For most financial planning questions a considered, better than ballpark, answer is completely fine.

Here’s an example: “How much will I need to retire?”

I read (stared at) a nine(!!) page guide answering this question the other day. Here’s my answer in fewer than 100 words:


What monthly budget do you want once work stops? Not sure? Use 75% of net income as a guide.

Annualise by multiplying by 12.


Multiply that number by 33.

That’s the amount you need available to be super safe = maintain capital, take account of likely inflation, tax, etc.


Multiply by 25 if eating into capital doesn’t bother you.


Multiply by 20 if you’re prepared to have to make lifestyle changes.



Ignore the State Pension – think of it as a safety margin.

The smaller the multiplier, the more chance spending must reduce.


But the answer to “how much will I need to retire?” is only about 5% of the picture. As such, the answer has no real value.

The question that really matters is “What do we have to do to get to that number?”. That’s 95% of financial planning.

And being sure you end up where you want is beyond valuable.


Boring But Effective | Truthful, Helpful, Kind 


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