“How much do I need to retire?” is one of the most common questions people ask when thinking about their financial future – and one of the hardest to answer with confidence.
The truth is, there’s no single figure that works for everyone. Effective retirement planning depends on your lifestyle expectations, when you want to retire, and your personal circumstances. While simple rules of thumb can provide a useful starting point, turning those estimates into a realistic plan takes deeper planning and, often, professional advice.
A simple starting point for retirement planning
Many people aim to replace around 60–80% of their working income in retirement. While some costs may reduce (such as commuting or pension contributions), others remain – and some, like healthcare or leisure, can even increase.
One commonly used guideline is the 25× rule, which estimates the size of pension pot you might need:
Expected annual retirement spending × 25
For example, if you expect to spend £30,000 per year in retirement, this suggests a pension pot of around £750,000.
It’s important to remember this is a guide, not a guarantee. Most retirement figures are shown in today’s money, so inflation must be factored in when projecting what your income will realistically buy in the future.
How much should you be saving now?
Another widely used benchmark in retirement planning is to save a percentage of your income equal to half your age:
- Age 30 → save around 15%
- Age 40 → save around 20%
This includes both your own contributions and any employer contributions. Again, this should be used as a sense-check, not a strict target. Everyone’s situation is different, and what matters most is whether your savings strategy aligns with your long-term goals.
Why your retirement number is personal
No two retirement plans are the same. The amount you’ll need depends on several factors, including:
- When you plan to retire
- The lifestyle you want to enjoy
- Whether you rent, have a mortgage, or own your home outright
- Your State Pension entitlement and any workplace or private pensions
Housing costs alone can make a significant difference to the level of income you’ll need in retirement, which is why personalised retirement planning is so important.
When financial advice really adds value
Rules of thumb are helpful, but they don’t show how your retirement might actually unfold over time. This is where professional financial advice can make a meaningful difference.
Through bespoke cashflow modelling, advisers can map your finances year by year, showing how income, spending, pensions, and investments interact – and how different decisions today could affect your future.
Alongside this, investment planning ensures your pension contributions aren’t just being paid in, but are working effectively for you, with risk and growth aligned to your goals and time horizon.
Together, these tools turn broad estimates into a retirement plan you can rely on.
Turning retirement planning into action
Setting goals and understanding how much you might need to retire is an important first step – but building a plan that gives you clarity and confidence is what really matters.
Omny Personal Finance can help turn your retirement goals into a clear, actionable retirement planning strategy. We create tailored plans that grow with you, your lifestyle and your circumstances, giving you confidence that your goals are achievable and the future you want is within reach. Whether you’re early in your career, changing jobs, growing your wealth, or thinking about retirement, our expert advisers are here to guide you every step of the way.
👉 If you’d like to understand whether you’re on track for the retirement you want, speak to our Personal Finance team today and take the next step in your retirement planning journey.