How much do I need to retire?

A better tomorrow depends on what you save today

It’s the question everyone wants an answer to: How much do I need to retire?

None of us are getting any younger and time flies faster as we age, so it’s important to plan ahead for retirement – a period that could last 40 years.

My wife gets frustrated when I spend more time planning our retirement than I do our summer holiday, but it’s a no-brainer… isn’t it?!

We all have what I call a wealth window – a limited period of time to create the wealth to see us through our retirement. As this window gets smaller, it’s harder to climb through.

If you have 10 years to go before you plan to retire, you have 120 more paydays to secure your retirement. Is that enough?

There are two types of people: those who outlive their money and those who don’t. Everyone wants to be in the latter group but as you approach retirement, it may be too late to do much about it.

There’s no escaping the fact that you must save – and save today – if you want your future to be brighter than your past. Time and the ability to invest regularly are always going to be your best assets.

When we save for retirement, we’re putting aside money for our future self; the person we will become.

To do this, we’re balancing our needs and wants – and after more than 25 years in financial planning, I can tell you that no matter how much you earn, you’ll always be balancing them.

Most people don’t get excited about saving each month because, just like a growing oak tree, you don’t see the outcome for years and we’re all too impatient for that.

This is why so few of us are able to secure the retirement we wanted, even though we all like the beautiful

If you have 10 years to go until you retire, that’s just 120 more paydays…

oak tree. But just how much money is enough?

Knowing how much you need to have saved for your retirement has always been difficult to calculate, mainly because we don’t know how long we’ll live, what inflation will be, and so on.

That’s why in The Money Plan, I share the rule of 300.

Essentially, if you want to have an income of £1,000 per month in retirement, you’ll need a pension pot of around £300,000 to achieve it.

This is a great ‘finger in the air’ estimate, but it’s not perfect. For those who want to take it a step further and create a plan for retirement, there’s an excellent free cashflow planning tool on my website, WarrenShute.com.

After entering a few basic details, it will calculate how exactly much you need to save each month to make sure you never run out of money in your twilight years.

Whether you have 36 or 360 paydays left until you stop working, thinking about the future now will help you make the decisions you need to achieve the retirement you want.