Everyone has their own version of an ideal retirement. You may want to go travelling, or perhaps you intend to spend more time at home with your family. You might be thinking of moving abroad or relishing the opportunity to achieve a long-held ambition.

Whatever you’re envisaging, achieving your ideal retirement will cost money. But how much?

This is what we mean by your “magic number”. Essentially, it’s the amount you’ll need to gain complete financial independence, retire comfortably, support your loved ones, and live the life you’ve imagined.

Read on to learn about how you can find your number, and why doing so is key to achieving your dream retirement.

While your number is a numerical figure, its value is rooted in something far more personal: how you want your future to pan out

Envisaging your ideal retirement is the first step to finding your number

While your number is, of course, a numerical figure, its value is rooted in something far more personal: how you want your future to pan out.

Many people go through their working life saving for retirement without ever setting goals or picturing how they want to live or what they want to achieve once they’ve finished work. It’s not uncommon for people to retire at the State Pension Age and simply make do with what they’ve accumulated over the years.

While there’s nothing wrong with that approach, we believe that retirement can be improved by clarifying goals early on and following a plan towards a future lifestyle that might otherwise have felt unattainable.

So, when it comes to finding your number, one of the first steps is to envisage what your ideal retirement looks like. Once you have that clear in your mind, you can start to map out what you’ll need to do and how much you’ll need to make it happen. And that’s where independent financial planning can help out.

A financial plan built around your circumstances, goals, and existing provision will help you determine your number and give you a strategy to reach it.

To get an idea of what you want your retirement to look like, your financial planner will ask you questions about your future, such as:

  • What will you be doing in retirement?
  • Where will you be living?
  • Who will you be with?
  • Would you like to help out other family members financially?
  • Do you want to leave any money in your will?

A financial planner can help guide you through these questions and set out specific objectives based on your answers. After doing this, you’ll have a clearer idea of what you want your retirement to be like, which is the first big step to finding your number.

Two further questions can help you find your number

Once you’ve envisioned your ideal retirement, there are two more questions that can help you determine the magic number that will support your lifestyle and goals:

  • How much income will you need to fund your ideal retirement?
  • When do you plan to retire?

So, let’s have a closer look at both of them.

How much income will you need in retirement?

Determining how much income you’ll need depends entirely on the lifestyle you’re aiming for and the goals you hope to achieve. Start thinking about:

  • Everyday costs – Regular expenses such as utilities, groceries, and leisure activities.
  • Major expenses – Larger financial commitments like holidays, home renovations, or contributing to your children’s or grandchildren’s education.
  • Care costs – The potential need for care in later life, which can be expensive in the UK, should be factored into your plans.

While having definitive answers to these questions might be tricky and some factors, such as life expectancy, health issues, the economic environment, and inflation, are unpredictable, a financial planner can help you estimate and model different scenarios to give a realistic range.

It’s also important to define what “enough” looks like. By doing so, you might discover you’re on track for an earlier retirement than you originally planned for. Conversely, underestimating expenses could strain your finances and limit your ability to achieve your long-term goals.

When do you plan to retire?

The timing of your retirement has a big impact on your financial needs.

You may love your job and want to work into your 70s. Or you could be looking forward to finishing work at 55 and travelling the world.

The earlier you plan to retire, the more you’ll need to save, as you’ll have fewer years to contribute and more years to fund.

Indeed, staying in work for even just one more year can have a significant impact on your retirement fund.

A report in Actuarial Post found that a 60-year-old with a £200,000 pension could boost their annual retirement income by 16%, simply by delaying retirement by one year and continuing to contribute £200 a month.

So, knowing when you want to retire can help ensure you have enough time and savings to enjoy the retirement you’ve always wanted.

Boost your annual retirement income by 16%, simply by delaying retirement by one year and continuing to contribute £200 a month

An Amber River financial planner can help you find your number

Working out your number isn’t always easy, but you don’t have to do it alone.

An Amber River financial planner will take the time to understand your goals and priorities and how near or far you are from achieving them. They will then help you create a clear plan that reflects your aspirations and makes best use of your money and existing provision.

Using tools like cashflow modelling, your financial planner can forecast your financial future and bring it to life through charts, graphs, and other visual tools. They can use it to model different scenarios so you can see immediately how planned and unplanned events could affect your lifestyle.

You can also incorporate your financial planner’s recommendations to see what effect they might have. When combined with the expertise of your planner, cashflow modelling becomes an extremely powerful tool.

With expert guidance, you’ll discover a number that matches your vision – and the practical steps to help you get there.

Secure Your Retirement with Expert Pension Planning

Planning for retirement can be complex, but with expert guidance, you can ensure financial security for the future. Whether you’re looking to consolidate pensions, maximise tax relief, or understand your options, we’re here to help.

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