Use our Retirement Calculators to
work out how much you need
to save for retirement

How much money do you need to retire on?

Impossible to answer? Perhaps. However with our retirement calculators, using different scenarios, we will give you a good idea how much money you will need in order to live comfortably in your retirement.

It's All About Spending Less Now?

Cut your spending now and you'll retire comfortably? No way! Don’t kid yourself into thinking that your spending is going to “naturally” decline rapidly when you retire. It won’t.

When you retire, you have more time to spend money and therefore it's much easier to start spending more rather than spending less. Also, as you get older, you may want to help your kids or grandchildren and increasingly you may also have added medical expenses and increased personal care costs.

Some people claim that you'll need only 70 per cent of your pre-retirement yearly salary to live comfortably. That may well be enough if you've paid off your mortgage and are in excellent health when you retire.

But what if you plan to build your dream house, holiday around the world, or get that Ph.D. in history you've always wanted, you may need 100% of your annual income - or even much more?

Unless you have a "plan" or are already near(ing) retirement, you can’t possibly know how much money you need in retirement - how much will you be spending on average on a monthly basis. Somehow you must make a realistic estimate on what you’ll be spending in retirement.

Once you have a good understanding what your likely expenses will be in retirement, then you will have some idea what you need per annum in order to live in comfort.

That's the number you're after!

Suppose you decide that £36,000 per annum will
keep you in good stead

When you retire, (hopefully) you’ll have State Pension. For our example, let’s assume you are entitled to State Pension totalling approx £7,000 per annum. You're therefore £29,000 short in order to meet your annual income needs.

So, how much do you need to save for a comfortable retirement?

The next step is for you to decide how mouch money your assets will need to generate - for instance 5 per cent, per annum (say from interest income or from dividends yielding 5 per cent).

Using 5 per cent might seem like a high number right now. Interest rates are much lower now, though there are still many solid 5 per cent dividend payers out there. It’s not reasonable to expect that interest rates will remain this low over the remainder of your life.

Anyway in the

Retirement Calculator

below, I have pre-set your expected annual return at 5 per cent. You now just need to insert the amount you require per annum.

Remember our example, above - we need £29,000, so insert 29000 and click: calculate

Retirement Pot Calculator

Use our simple Retirement Pot Calculator and find out how much money you will need to have at retirement date in order to secure the amount of money you would like to live on when you retire.

Your (additional) retirement income: £ a year

Click: Calculate
Amount required at retirement*: £
*Assuming 5% interest or dividend yield, per annum

Let's do the math behind this calculation . . .

Take the £29,000 and divide it by the pre-set annual return of five per cent. Just take the £29,000 and divide it by 5% – you get £580,000 - (multiply 29000 times 20).


At retirement, you need to have at least £580,000, and, then you need to generate an annual return of at least 5 per cent (over the long run) in order to earn £29,000.

You now know that your target amount is: £580,000

Are you shocked?

I am sorry, I am not trying to scare you! But this is for real!

You can do several things now, including:

  1. run the retirement calculator again, using another amount, say £25,000 or £20,000, instead of £29,000
  2. decide that the return you’ll be able to earn on your investments will be higher than 5 per cent per annum, on average
  3. start a dividend growth stock portfolio in your stock and shares ISA. For instance £100,000 in dividend paying shares yielding 4% today and growing at 7% per annum, generate £16,000 in annual tax free income in 20 years from now

  4. click below for some of our other retirement calculators operating at different annual returns, including:

    • 6 per cent
    • 7 per cent
    • 8 per cent
    • 9 per cent
    • 10 per cent

Return from this Page to Home
If you came here via a search engine, you might want to go back to my main page on early retirement and investment

Get detailed information on shares and dividend prospects of many
FTSE350 companies completely FREE of charge!

Subscribe to
Dividend Alerts

and get the
Guide to Dividend Investing
at Half Price!

Your E-mail

First Name

Then Click

Check your email to confirm!

Don't worry -- your e-mail address is totally secure.
I promise to use it only to send you Dividend Alerts

Introducing Dividend Income

What if you knew when high
quality dividend paying
shares are historically
undervalued or overvalued?

Wouldn't that be invaluable
information allowing you to
make much better informed
investment decisions?

Dividend Income Investor
1. shows you what we buy,
2. when we buy shares and
3. when we sell shares in
our own real-money
Dividend Income Portfolio

CLICK HERE to find out

By continuing to use this site, you agree to the use of cookies.

Click HERE to find out more about cookies and our Cookie Policy.

Get Your Guide to Dividend Investing for just £19.99.

Guide to Dividend Investing cover

Click Here to learn more.

Own foreign shares? Reclaim dividend withholding tax!

Dividend Tax back

Follow me at Twitter, click:

Get live commentary on dividend paying companies and updates of our progress at Dividend Income