In a study carried out recently, it was found that only 41% of over 55s in the UK actually know how much they will need when they retire. In all likelihood, the figure is probably far less than that.
How many people actually take the time to stand back, imagine how their ideal ‘rest of life’ will look, what would make their remaining days full and engaging, and at the same time, predict the exact age they are going to die? Probably very few indeed (I would say none to be honest).
The retirement planning world is filled with the abundance of worry. Investment growth rates, annuity rates, the impact of draw-down, mortality, the solvency of final salary schemes, taxation and so on. Add to that, very few people (other than those with a very aggressive terminal illness) know how long we will live for, and all of a sudden, the magic and dark art of knowing exactly how much you need for retirement seems almost something of a fantasy.
Of course, the financial picture is only one small part of retirement. Let’s not get excited here by thinking all of our problems can be solved by a decent pension. Decent to one person, is miserly to another. Even more important, is the currency of time. Is it better to retire early, enjoy the golden healthy years, then slow down, or plod on, earning more, building a bigger pension, only to be unable to enjoy the fruits of your labour.
When you know how that full and rewarding ‘rest of my life’ looks, and how soon you need it to commence, then you can start to plan.
When you have had that deep conversation about all the things which you are yet to do, be it money or time sensitive, then a clearer plan starts to unfold. When you make the big decision whether to live the rest of your life, or just survive through until death, that is the time when you will start to have a greater idea of how much you will need to retire. A clever calculator on a website will never give you that sort of answer.
You cannot accurately pick this magical figure, but what is possible, is to design the rest of your life, to bring happiness and joy now, with financial responsibility in the future, so that you live that fulfilled life, without the worry of the 59% of those who cannot predict the future. And anyway, who wants a ‘comfortable retirement’ have a thrilling one!