LTranscript from video "Can you retire with less than £59,000 per year?"
at https://youtu.be/-Iu5iqXgI-k

To calculate if you have enough in retirement the calculation is really easy (income-expenditure) and if you get a positive number your good. But that is a bit like when people tell me losing weight is just calories in - calories out – it doesn’t really help does it. Wouldn’t it be great if somebody could do a massive survey with thousands of people and work out how much the average person need to retire in our country. Well actually they have The Retirement Living Standards have published there report for the UK for 2024. It wells you what you need if your are single or a couple for a basic retirement, a moderate retirement and a comfortable retirement.

I pulled out the figures and set down with Tracey my wife, on video and revealed to her what the numbers are – you should have seen her reaction – the video will be coming out very soon. Anyway let me give you one number from the survey here and please let me know your reaction in the comments below. The single number I am going to give you is for the annual income needed for a retired couple to have a comfortable retirement – the number is £59,000 per year So I wont dig into the £59,000 figure here I will do that in the next video but lets look at some more specific numbers rather than average numbers. When we retire, we're no longer earning a salary so we need something to replace it.

Most of us wont get our state pension until at least 66 (67 for me) and likely later than that for most of us. We might have a defined benefit pension from our workplace especially if you've worked in the public sector. We might do some paid work or earn income from a property we own. ________________________________________ These are all sources of income, but they might not be enough to cover the lifestyle we want in retirement. If our expenses exceed our income, we will need to make up the difference somehow. That's why we save and invest throughout our lives, building up assets to cover that difference. Assets include things like savings accounts, ISAs, pension funds, and investment accounts—places where we can withdraw money when we need it. When add the value of those accounts together and you come to a number, from this number you can work out if you have a enough to last the rest of your life.

Obviously, there are many variables here. Everyone's definition of a comfortable standard of living is different. We don't know how long we will live, how much inflation will eat away at at our savings, how the stock market will perform, or what change the government will make to pension rules. On that one I am pretty sure we will be seeing some reduction in the amount of pension we get to keep in the future – let me know if you agree in the comments. Some people will have fixed pensions, others will have pensions that rise with inflation.

Some may have a mortgage, others will have paid theirs off, and still others will be renters all their lives. The further we are from retirement, the less clear things will be. In all this uncertainty there is one thing that is certain, most of this will be guesswork? Once we have our number, we can apply the 4% rule. This is definatly not really a rule, at best it is a very rough tool we can use when we don’t have anything better to use. It says that you should be able to draw 4% of the value of your savings Investments and Pension funds each year and it will last the rest of your life for most people. Another rough tool is the to take what you need each month and multiply if by 375. This will give you the amount you will need in your pot – it also accounts for tax as well which is useful.

If you calculate you need £1000 per month, then you will need £375000 in you pot – though you are likely to also have a state pension. If you have a full state pension you can reduce you pot by £300,000 so you would only need so calculate what you need £75,000 in your pension pot. Lets do the same calculation but say that you need £3000 per month in your pension, So we multiply by 375 and get £1,125,000 – take of your £300,000 if you have a full state pension and that means you will need £825,000 in you pot – sound scary doesn’t it. If you have a defined benefit pension this is likely to reduce this amount quite considerably though. If you have a complex set of defined benefit pensions then the 375 rule is not really going to work for you. if this is helpful so far please hit the like button and subscribe to the channel if you're not already this is one of many I will be making about building towards retirement you might just think it's an impossible task what's the point throw your hands in the air and give up but please don't so how do we give ourselves the best chance of hitting these targets once you know how much you have to save each year.

There are a few things you can do to get there as efficiently as possible firstly use all the tax breaks that you can salary sacrifice pensions are easily the best for this you get tax that you would have had to pay anyway redirected into your pension instead and if you're employed you get money from your employer too so it's definitely important to put pensions to good use. done your numbers and you realize actually you can't afford to save what you need each year or each month that's okay you got to start with what you can afford and work up from there and that means you have to find a figure that is manageable but slightly uncomfortable to save and invest each month and then commit to reviewing it after three months and try and put it up even if it's only by5 or10 a month do this every three months until you just can't push your savings right any further also commit to saving most but not all of any pay Rises or bonuses that you receive you have to still live for today but we need to have a mind towards tomorrow as well once a year recalculate and review things do the sums to work out your number again maybe.

Wouldn’t it be great if somebody could do a massive survey with thousands of people and work out how much the average person need to retire in our country. Well actually they have The Retirement Living Standards have published there report for the UK for 2024. It wells you what you need if your are single or a couple for a basic retirement, a moderate retirement and a comfortable retirement. I pulled out the figures and set down with Tracey my wife, on video and revealed to her what the numbers are – you should have seen her reaction – the video will be coming out very soon.

Anyway let me give you one number from the survey here and please let me know your reaction in the comments below. The single number I am going to give you is for the annual income needed for a retired couple to have a comfortable retirement – the number is £59,000 per year. See you on the next video to see what Tracey thought of that!