Money Guides · Retirement · 6 min read
How Much Money Do I Need to Retire? Start With Your Retirement Number
The figure that matters is monthly, not total
Large lump-sum targets are easy to quote and almost impossible to act on. The figure that changes decisions is the monthly amount your life will cost once you stop earning.
Work it out from what you spend now, not from a percentage rule. Your own expenditure is the only honest starting point.
Add what your current expenditure hides
Most household expenditure figures leave out three things: debt repayments still running into retirement, regular family support, and medical costs that rise rather than fall with age.
If any of these will continue, they belong in the number. A retirement plan built on an understated figure is a plan that fails quietly, years in.
Subtract the income that will still arrive
Against that monthly requirement, set the income you can reasonably expect: pension, annuity, rental, any continuing work.
The difference between the two is your gap. It is the only number worth planning around, and it is usually smaller and more addressable than the headline lump sum people fear.
Understand your runway
Once you know the gap, the next question is how long your savings would cover it. That length of time — your runway — tells you whether the issue is urgent or manageable.
A short runway is not a verdict. It is information, and it arrives early enough to act on far more often than people expect.
What to do with the answer
There are only four levers: reduce the monthly requirement, increase the income that will arrive, extend the earning years, or increase what is being set aside now.
Most people need a modest change to two of them, not a dramatic change to one.
Next step
Work out My Retirement Number™
RETIRE READY™ takes you through your Reality Check™ and Runway™ and produces a personalised report showing your monthly requirement, your gap and your priorities.
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