Even if you don’t plan to retire, it’s still advisable to plan for retirement.  You may find retirement forced upon you. Alternatively, on a happier note, your plans may change for positive reasons.  For example, you may want to spend more time with your future grandchildren.

At a minimum, it’s better to have money and not need it than vice versa.  With that in mind, here is a quick guide to calculating how much you’ll need for your retirement.

Pick a (provisional) retirement date

If you’ve no plans to retire, then pick a worst-case scenario and think about what that would mean.  If you do have plans to retire, think about a (provisional) date.  Then, ideally, take a few years off that to give you room to manoeuvre if your circumstances change.

Define your transition into retirement

In other words, how long are you going to be able to carry on working full-time in your current employment area?  What happens after that?  Do you go part-time or start freelancing?  Do you transition into another work area?  Do you go straight into retirement?

Confirm if you will bring any liabilities into retirement

Retirement used to be synonymous with being mortgage-free and, effectively, debt-free.  Retirees often still had credit cards but it was unusual for them to be dependent on them.  These days, however, it’s not that unusual for people to head into retirement with mortgages and possibly other debts as well.

If that’s your plan, then you’ll need to make sure that you have enough money to manage them.  This is particularly important if you need to remortgage before or during your retirement.

You will need to be able to convince lenders that you can meet their affordability criteria although you will not have income from employment.  If you can’t, you may find yourself forced to downsize.

Think about where you want to live

Your choice of where to live is likely to have a huge impact on your need for retirement funds.  It’s therefore highly advisable to give it very thorough consideration.  You may need to give yourself some physical and emotional space to do this effectively.

If you’re attached to your current home, then your initial reaction may be to stay there permanently, or at least for as long as you can.  That may indeed be the right choice for you but you should at least weigh it against the other options.

Likewise, if you’re set on downsizing that may be the right choice for you.  Even so, it’s advisable to assess it against the option of staying where you are.  Furthermore, if you do plan on downsizing, it’s advisable to think very carefully about what you want from your new home.  You may find that getting this costs more than you anticipated.

The reality is that either option is going to bring its pros and cons both practically and financially.  Very few people are going to come up with a choice that’s clearly right or clearly wrong.  It’s just what works best for you.

Work out your needs, wants and priorities

It’s best to take this step after deciding where you want to live as your location will be a major factor in your lifestyle.  For example, if you want to live deep in the countryside, you will probably need to allocate more for transport so you can continue to meet people.  You may also find that getting a decent internet connection is more expensive than in the city.

By contrast, if you live in the city, you will probably have everything you need on or close to your doorstep.  Your housing costs, however, are likely to be much more expensive than in the countryside.

For pension advice, please get in touch.


The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Approved by The Openwork Partnership on 9/9/23