3 simple ways to find out if your savings can fund your dream retirement

As you enter your 40s and 50s, your attention may turn to one key question: “when can I retire?”

Indeed, even if you love what you do, the time will come when you’ll need to hang up your boots and enter this new chapter of your life. While retirement is an exciting prospect, you may have certain concerns about what it will be like, especially when it comes to money.

When considering what your ideal retirement age might be, the affordability of your retirement plans is likely to be a dominant factor.

The truth is, there are easy ways you can figure out how affordable your dream retirement is, and at what age you might be able to stop working.

Here are three simple ways to find out if your savings can fund your dream retirement.

1. Collate all your savings and investment information into one place

When preparing for retirement, one crucial step to take is to collate all your financial information and look at the whole picture.

While you might look at small portions of your financial situation more regularly – your salary, for instance – your savings and investments will tell the full story of your future financial circumstances.

These might include your:

• Personal pensions. This includes any defined contribution (DC) pension pots you hold, and your defined benefit (DB) pension if you have one.
• National Insurance (NI) record. By checking your NI record on the Government website, you can see the amount of State Pension you are on track to receive.
• Investment portfolio. Your Individual Savings Accounts (ISAs), and any other non-ISA shares you hold.
• Cash savings. This includes any non-invested funds you have.
• Properties. You may choose to sell or rent out properties you own in order to fund your retirement later on.
• Inheritance. If you have received, or are set to receive, an inheritance, this can factor into your retirement plans.

By assessing all these elements as one wide landscape, you can begin to focus on how and when you can retire.

If you have lost track of some of your financial information, speak to a Financial Planner. We can help you track down lost pensions, access investment information, and take a holistic view of your finances with an expert eye.

2. Consult cashflow modelling software for data-driven results

One of the benefits of working with a Financial Planner when planning your retirement is that you can utilise state-of-the-art software to produce data-driven results.

Indeed, once you have compiled your information and assessed your circumstances, the next step could be to use cashflow modelling software to project your prospective retirement income.

When you put your financial and lifestyle information into our cashflow modelling software, it produces a hypothetical view of your retirement situation. The factors revealed can include:

• What age you can afford to retire, based on your desired retirement income
• How inflation might affect your savings and investments over the years
• How you can afford to help your children and grandchildren financially
• The tax you may need to pay in retirement.

As you input different scenarios into the software, it will produce varied potential outcomes which you can then discuss with your Financial Planner.

This is where step three comes into play: creating a strong retirement plan.

3. Forge a robust retirement plan with the help of an expert

Once you have worked out if your savings are enough to fund your dream retirement using our cashflow modelling software, together we can begin to forge a data-driven financial plan.

While our technology helps us to put your wealth under the spotlight and focus on the numbers, your retirement plan will be driven by something other than money: your aspirations and goals.

Here are some things you might wish to achieve in retirement:

• Taking bucket list trips abroad
• Enjoying a relaxed lifestyle with your loved ones
• Provide financial opportunities for your children and grandchildren
• Spend more time volunteering for a charity, working in your community, or caring for young children in your family.

Marrying these goals with the data our cashflow modelling software produces can help us form a financial plan that helps you achieve everything you want later in life. We’ll make your life goals the centre of the conversation, ensuring that all affordability criteria is lined up with what you want to do in retirement.

Having this plan in place means that, whether you are set to retire in the next 5, 10, or 20 years, you can move forward with the peace of mind that a Financial Planner is on your side. Plus, as your life evolves, we can shape your financial plan around new challenges and opportunities.

Get in touch

Can you afford your dream retirement? We can help you answer that question. Email us at enquiries@pen-life.co.uk, or call 01904 661140.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate cashflow planning.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

All information is correct at the time of writing and is subject to change in the future.