How much do I need to retire?

The age old question, how much do I need to retire? There is no fixed amount on how much you need as your requirements change all the time. For example, if you have to move to a nursing home, you will need more money than if you stayed at home. If you become grandparents, you are going to dote on those grandchildren and spend money on them. There are a number of areas that you need to look at before deciding whether you have enough to retire:

Lifestyle Costs

  1. How much debt do you have? I advise all my clients to clear all their debt before they stop earning.
  2. How much does it cost to run your household?
  3. How much does it cost to run your cars and how often do you want to change them?
  4. How much do you spend on club subscriptions, clothes, going out etc?
  5. What big things do you want to do when you have all this free time? How many holidays do you want to go on every year?

Cost Variations

Not everything is going to stay constant for the rest of your life. There are some key factors that have to be taken into consideration:

  1. Inflation. While inflation is low now, it won’t always be. Long term inflation of 2.5% – 3% is a prudent assumption.
  2. A time will come when warmth and comfort is more important than going on holidays four times a year. Lifestyle costs will decrease as you spend more time at home and less time out and about.
  3. Healthcare costs will take up an ever increasing percentage of your costs. Add in the potential costs of nursing homes, which are a very big drain on your assets


  1. What assets have you got and when can you access them? At retirement, it’s all about being able to avail of the cash value. A property is worth nothing unless you sell it, it is the rental income you have to look at.
  2. Have you a business? Will you be able to sell it if you wanted to?
  3. If you don’t sell it, can you retire and claim a regular income from it without putting too much a strain on the company’s finances?
  4. Do you have a pension to provide you with a regular income?
  5. Are there other assets that can be used to supplement your income or may be sold at some time in the future?

As you can see, it is not that simple to work out how much you need to retire. It is something that evolves over time and needs to be updated all the time.