Retirement planning Comfortable retirement Do I Need £1m for Retirement? The Importance of Saving and Investing

1. HOW MUCH MONEY DO YOU NEED
FOR RETIREMENT?
ALPESH PATEL OBE

2. Retirement
planning
Retirement is a dream for almost everyone.
Relaxing, traveling, enjoying family — they
should be the best years of our lives. But
how much money do you need for
retirement?

3. Comfortable
retirement
Working out how much money you need for retirement depends
on a variety of factors. One of the most important considerations
is your standard of living.
The Pensions & Lifetime Savings Association (PLSA) suggests that a
retired couple's minimum is around 17K a year. For a single person,
they recommend 11K.
For a more comfortable retirement, the costs shoot up. The
PLSA proposes something in the region of 30K for a couple who
want to holiday a few times a year and enjoy other luxuries.
The typical convention holds that retirees need around
£1million. The 4% rule suggests an annual income of £40,000.
However, retirees will need to factor in tax on their pensions.

4. Do I Need £1m for Retirement?
But do you really need a pension that large for retirement? A lot depends on your
future expenses, like healthcare or holidays. One of the other significant factors that affect
how long a pension lasts is location.
Choosing the correct city to retire in can make a considerable difference. Either way, many suggest
that the general rule is that you'll require about 60-70% of your pre-retirement income.
Of course, not everyone will have the luxury of a million-pound pension pot. Many retirees will
need to get by on half that amount. It's never too early to start thinking about retirement — even
if you're in your 20s.

5. The Importance of
Saving and Investing
The UK state pension is less than £10K per year. While
this sum is not insignificant, it falls short of the amount
required for a comfortable retirement. Most people
will struggle to live on that budget, which underlines
the importance of saving and investing.
Saving is a good step, but low bank saving interest
rates barely keep up with inflation. As a result,
investment should form a vital part of your retirement
strategy. The S&P 500 regular returns around 8-10%
on investment. A 35-year plan with
monthly investments of just £483.60 could make you a
millionaire.

6. The Importance of
Saving and Investing
The S&P 500s performance in recent years has been incredible. £500 per month invested in the index
over the last 40 years would be worth a staggering £3.3 million today.
Purchasing exchange-traded funds, also known as ETFs, is a great way to track an index like the S&P
500.
Additionally, you could potentially gain market-beating returns with some savvy stock picking and
a bit of research.
Of course, not everyone has a spare £500 per month. However, experts suggest that investors
abide by the 50-15-5 rule. In short, that means investing about 15% of your earnings each year.

7. Summary
Retirement is full of many surprises; not all of them are pleasant
Increased life expectancy, taxes, and inflation are all factors that can
chip away at a pension
Retiring with a comfortable amount takes discipline and some good
choices

8. References:
https://www.thesun.co.uk/money/16393875/how-much-save-to-retire-comfortably/
https://www.express.co.uk/finance/personalfinance/1502272/how-much-to-retire-uk-pensioners-holiday
https://citywire.co.uk/funds-insider/news/how-far-will-a-1m-retirement-pot-go/a1563646
https://www.fool.com/retirement/2021/10/07/do-you-really-need-1-million-to-retire/
https://www.investorschronicle.co.uk/ideas/2021/10/22/can-we-supplement-our-retirement-income-by-23-000-a-
year/
https://www.express.co.uk/finance/personalfinance/1502506/pension-planning-uk-how-much-to-retire
https://www.wsj.com/articles/biggest-surprises-after-retirement-11634935318
https://www.investorschronicle.co.uk/ideas/2021/09/24/do-we-have-enough-to-retire-on-50-000-a-year-now/
https://www.forbes.com/advisor/in/retirement/10-reasons-why-you-need-to-plan-your-retirement-seriously/
https://www.cnbc.com/2021/10/15/retiring-with-500000-how-much-youll-have-in-your-monthly-budget.html
https://www.marketwatch.com/story/im-24-live-with-my-mom-and-pay-rent-i-think-ill-need-2-million-in-
retirement-how-do-i-save-that-much-11633456725
https://www.visualcapitalist.com/is-1-million-enough-for-retirement-in-america/
https://www.fool.com/investing/2021/10/20/how-much-to-save-each-month-to-become-millionaire/
https://www.msn.com/en-us/money/retirement/want-dollar50000-in-retirement-income-heres-how-to-
determine-how-much-to-save-to-get-it/ar-AAPPyEF
https://www.cnbc.com/2021/10/05/retirement-budgets-how-much-you-can-spend-if-you-have-1-million.html
https://www.cnbc.com/select/how-much-of-your-income-should-go-toward-investing/
https://www.fool.com/investing/2021/10/04/is-the-sp-500-all-you-need-to-retire-a-millionaire/

9. FREE EDUCATIONAL RESOURCES AT
WWW.CAMPAIGNFORAMILLION.COM