Have I saved enough to retire?

  • 29 June 2020
  • 10 mins
  • It’s entirely reasonable to worry about whether you have enough to retire on.

  • There are many unpredictable factors like longevity, investment returns, inflation and your future health needs to consider.

  • The earlier you think about these things, the better prepared you could be for your third age.

How much is enough?

If you’ve been pondering this question, you’re certainly not alone. It’s a common question and concerns about retirement is one of the three main motivations for seeking financial advice [1].

You’re right to be concerned because deciding how much to set aside for your retirement is important. The world has moved on from the days when you finished work with a gold watch and a reliable final salary pension that went up in line with inflation and lasted as long as you did. We are becoming increasingly responsible for our own financial futures, and you may have to get your hands dirtier now to take charge of managing your retirement income yourself.

You should be thinking about:

  • How many years you will spend in retirement

  • How much you are likely to spend in any one year

  • Your healthcare needs in later life

Because your spending patterns will be a large determinant of how much you need to have set aside for retirement.

How long could you live till?

People tend to underestimate how long they are likely to live [2], despite this being a key figure in retirement planning. According to the ONS life expectancy calculator, if you live in the UK and are currently aged 65, men will live on average to 85 and women to 87 [3]. So about twenty years.

You’ll want to consider the best-case scenario too (or the worst if you’re worried about how far your savings till take you). According to the same calculator men have a one-in-ten chance of living to 96, and women to 98 [3]. That’s thirty years.

How do you imagine your retirement lifestyle?

Take some time to think about how you live now, how much you spend on your current lifestyle, and how you’d like to live in retirement. Some people dream of sitting in the garden reading the paper, while others want to tour the world – although that’s off the agenda for the moment.

The rate at which you spend is likely to have a large impact on the rate at which you go through your savings.

Do you want to stay in your home or downsize? How about going for semi-retirement and working part time? Maybe the extra money and/or the social interaction appeal? The number of over 70s working more than doubled between 31 March 2009 and 31 March 2019 [4].

Read more: Are you ready to jack it all in?

What about retiring abroad? Would you like to join the thousands of UK retirees tempted by better weather and potentially lower living costs? [5] While this is not something you can currently do, it could still remain a long-term dream. But be conscious of the fact that your retirement income is likely to be paid to you in sterling, and currency fluctuations could make a significant difference to your month-by-month cash flow.

Think about how your day-to-day spending will change. If you don’t have to commute to work, wear smart, dry-cleaned clothes and eat lunch in city centre neighbourhoods, you may find your everyday spending reduces.

How healthy will you be?

The state of your health will affect not only your longevity but also your spending in terms of healthcare, personal care and lifestyle. You might dream of climbing Machu Pichu but will you have the physical strength and agility to do it? If you retire abroad, will you have to cover your own medical expenses?

You can never be sure what’s going to happen, but taking into account your current health issues, family history and lifestyle (smoking, drinking, level of fitness etc) may offer some clues.

DNA testing could highlight genetic predispositions for some conditions like heart disease, brain disorders and cancer. The NHS provides this free of charge if your doctor thinks you might have a health condition caused by a genetic disposition or by a change to one or more of your genes [6].

They are also available privately. Or maybe you’d rather not know.

How much would you like to leave to others?

For some people, leaving money to family or a good cause is a strong desire. For others it’s a case of ‘whatever’s left over.’ If you do have ambitions for a financial legacy, include this in your plans.

How much regular income will you have?

So far we have looked at the scary stuff: if you spend £20,000 a year for 20 years you would be looking at £400,000; for 30 years its £600,000. And that’s before considering the effect of inflation on prices.

But before you reach for the smelling salts, you probably won’t be relying solely on your savings and investments.

Factor in how much you’ll get from state and final salary pensions, which are thankfully a little easier to predict. You could also consider buying an annuity with your savings if you want the security of regular payments. But they can be expensive when interest rates and government bond yields are low [7].

You can check how much state pension you are likely to receive on the government’s website here. You can also find out if topping up on incomplete years of National Insurance could improve the figure. However, you can usually only make voluntary contributions for the previous six tax years [8].

Read more: Help! I’m retired how much can I spend?


Forward planning can be complex for even the simplest of retirements. There are many moving parts, and some of them are difficult to quantify with a high degree of accuracy. Googling results can only help you get common, average, or ballpark estimates of what your third age could look like. What you really need is an analysis of what your personal retirement dream could cost to fund. Then look at what resources will be available or you currently have, and then decide on a plan of action that could help you get closer to your dreams.

How much can I afford to set aside?

You may have grand visions for a luxury retirement, but if there’s not enough money in the pot you may never turn them into reality. There’s a balancing act between the life you live now and the life you want to live in retirement. Taking into account the potential for future investment growth, a bit more money put aside now could make a big difference in the future.

The value of investments and the income from them can fall as well as rise and are not guaranteed, and you might not get back your initial investment.

Do you cut your suit to fit the cloth or find a way to increase the amount of fabric you have? This is where talking to a financial adviser could help

Important information

Any views expressed are our in-house views as at the time of publishing.

This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.

Fees and charges apply at Schroders Personal Wealth.

In preparing this article we may have used third party sources which we believe to be true and accurate as at the date of writing. However, we can give no assurances or warranty regarding the accuracy, currency or applicability of any of the content in relation to specific situations and particular circumstances.


[1] June 2017 page 19 “Summary of usage”

[2] 16 April 2020

[3] accessed on 4 June 2020

[4] 27 May 2019

[5] 1 January 2020

[6] accessed on 04 06 2019

[7] 1 September 2019

[8] accessed on 20 May 2020

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