What Is a Comfortable Income in Retirement?
Understanding What You’ll Really Need to Live Well
As more people approach retirement age, one essential question often arises: What income will provide a truly comfortable retirement?
Many people significantly underestimate what they’ll need. Understanding the difference between a “moderate” and “comfortable” retirement is key to setting realistic goals.
Perception vs. Reality: Income Expectations
According to recent research:
- 39% of over 50s believe an annual income of £10,000 – £20,000 is enough for a comfortable retirement.
- In reality, that figure only provides a moderate lifestyle.
- A comfortable standard of living requires around £33,600 per year for a single person.
This gap between expectation and actual need highlights a widespread lack of preparedness.
Why the Gap Exists
There are several reasons people fall short:
- 49% regret not saving earlier into their pension.
- 64% wish they had contributed more during their working years.
- Many delayed contributions due to:
- Financial instability (51%)
- Prioritising children (42%) or mortgage payments (40%)
- Spending on holidays (32%), clothing (21%), or even pets (10%)
Some people still believe contributing just 0 – 5% of their salary is enough – when in fact, much more is typically needed.
The Disappearing Employer Pension and DIY Retirement
The era of working for one employer and retiring on a defined pension is nearly gone. Today, most responsibility for retirement planning rests with the individual.
Yet over 70% of over 50s have never sought professional financial advice, despite data showing they could gain as much as £47,000 more over a decade by doing so.
What a Comfortable Retirement Really Includes
To live comfortably in retirement, you should aim for the following:
- Two holidays abroad annually
- A car replaced every 5 years
- Meals out and leisure activities
- Clothing and home maintenance budgets
- A financial cushion for emergencies
To afford this lifestyle, most will need an annual retirement income of £33,600 or more.
How to Get There
To work towards a comfortable retirement:
- Know your retirement income target.
- Save early and consistently.
- Increase your pension contributions when possible.
- Seek professional financial advice.
- Track your pension performance regularly.
It’s never too late to act – but the earlier you start, the better your chances.
Take Control of Your Retirement Today
Many over 50s say they wish they had saved more, earlier. Don’t leave your retirement to chance. Take stock of your finances now, and plan for a lifestyle you’ll genuinely enjoy.
For personalised advice on preparing for a full and comfortable retirement, speak to a qualified financial adviser today.
Sources:
https://www.retirementlivingstandards.org.uk/news/retirement-living-standards-updated-to-reflect
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