Results: Saving for retirement – How much will you need?
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
A few months ago we ran our ‘Saving for retirement – How much will you need’ quiz, with questions designed to determine how much money you may need once you stop working.
Factors taken into consideration included mortgage payments, food spending and leisure activities. Of course, two of the biggest factors determining your retirement pot are your current age and the age you are wanting to retire by. The more time you have on your side to save towards retirement, the more opportunity you have to build a bigger pot. That’s why saving as much as you can, as soon as you can, is important for young people. You may not have realised the big difference it can make.
Our retirement quiz highlighted this importance. Once completed, the quiz gives you an idea of what your required monthly contributions may need to be for the lifestyle you envision in retirement, and what your pension pot should be.
Now that the results have been collected, here are some of the things we found…
-Despite having such a large age gap between them, under 18s and over 65s had a similar expected retirement age on average. Young people expect to retire by 67, while over 65s are aiming to be retired by 68.
-For those people in the 25-34 and 45-54 age bracket, a retirement age of 61 is desired. That means saving early and as much as you can is going to be essential.
-When it came to cars, under 18s predicted they’d spend £83,167 on cars over the course of their retirement. The older people get, the more this sum declined. This could indicate that with maturity people get more realistic with their expectations.
-For leisure, we observed that younger people have the biggest plans for retirement spending, across cars, holidays and all aspects of leisure. It could be the case that younger generations are unfamiliar with the potential financial commitments in later life. The good news is for younger people that they have plenty of time to build their pension pots, it isn’t impossible for them to achieve their aims when investing over a number of decades.
-In terms of a gender split, on average, men believe they’ll need £73,411 for their retirement. Women, on the other hand, believe they will need £44,599 on average — that’s a significant £28,812 less.
Find out how much you could need and take the quiz for yourself. Visit www.tpinvestor.com/retire.