The Challenge Of Making The Minimum Wage In Retirement
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.
Will you make the equivalent of a minimum wage from your retirement fund? People are living longer and stretching their retirement over a longer period of time, meaning the potential exists for underestimating how much money you may need.
Indeed, our Savings Gap research indicates that based on actual savings behaviour, people in the UK are on course to receive just £6,000 a year from their retirement fund. Could you live on £6,000 a year? That’s less than the current UK minimum wage.
Our research revealed that people may need £23,000 a year in retirement to live comfortably. While some people may have paid off their mortgage by the time they reach retirement age, there are still expenses to consider such as bills, shopping, luxuries and holidays.
Here’s some steps you can take which could help towards your retirement.
1. Set A Goal
By setting a goal, you are creating a focus point to motivate you over the course of your journey. Think about what it is you want. How much do you think you’ll need to live a comfortable lifestyle in retirement?
2. How will you get there?
Once you have your goal, you can decide how you are going to reach it. How much do you need to put aside, and for how long, to build your pension pot? Things to think about are types of investment and risk profiles.
With your goal in mind, it is important to track your journey towards achieving your aim. Is your investment on track? Do you need to top-up or adapt the money you are putting in?
Keep in mind that a diversified investment over a long period of time could help to ride out any fluctuations in the market. Saving or investing little and often over the long term could help you achieve your goal.
4. Use our retirement calculator
If you want to get an idea of what you may need in retirement, try our quick and easy interactive quiz.