Use A Pension Calculator To Find Out Your Likely Retirement Income
Your retirement is a time of life for you to enjoy. Really enjoy. To do that, it’s important to know ahead of time that you’ll have enough money to live the lifestyle you prefer to live. That’s where a pension calculator comes in.
A pension calculator will take into account a whole host of factors as well as figures and show you how on target — or not — you currently are for creating your ideal retirement. This article will take you through the key points for arriving at an accurate retirement figure.
It will also identify any retirement shortfalls so you can make corrections now that will benefit you later.
Some Points To Consider
Pension calculator tools are useful for providing you with a good indication of how on track you are with your retirement preparations. They are not absolutes, however, and for personalised advice and recommendations, you should consider having a full pension review.
A full pension review will provide you with accurate information about your pension pots and their performances. This in turn will help you decide if you are currently with the best pension provider or whether you would receive a better return by switching providers.
What’s Needed For The Pension Calculator?
There are several factors that need to be input into the pension calculator:
- Your target retirement age
- The level of income you think you’ll need in retirement
- Your (and your employer’s) current contributions to your pension plan(s)
- The current value of your pension pot(s)
Calculating Your Living Costs
“It all adds up.” You’ve probably heard that phrase — or said it yourself, even — many times. And never was it truer than when it comes time to figuring out how much income you’ll need in retirement.
The following list is to help you figure out where your money currently goes so you can have greater awareness of what you will need for your retirement.
Once you have figures for all the individual items, add them all together to create a total figure to use in the pension calculator.
- Basic cost of living: Bills, such as water, gas and electric
- Holidays: Airfare, accommodation and daily spending for food, drink and whatever else you enjoy doing when away. How many holidays will you be taking each year?
- Weekend breaks: Same as holidays but just a couple of days rather than a couple of weeks
- Dining out: Whether it’s alone or with friends, how often do you do it and how much do you usually spend?
- Home improvements: Your home will always need jobs doing, even when you’ve retired. How much do you think you’ll need each year to keep up with the maintenance?
- Cars and other vehicles: Weekly running costs, such as petrol, along with yearly costs such as insurance, MOT and tax
- Clubs / memberships: Do you belong to a fitness club, a golf club, a bowling club or anything similar? As with all expenditures, remember to factor in what you spend while you’re there in addition to the cost of the actual membership
- Shopping trips: How often do you take them and, more importantly, how much do you usually spend?
- Theatre / cinema / concerts: How often do you go and what are the usual costs of tickets? Remember to factor in other spends such as transport if you go public as well as food and drinks
- Grandchildren: For every grandchild you have, there’ll be a birthday and Christmas to allow for.
Remember, this list is comprehensive but not exhaustive. What else forms part of your life that costs you money? Add it to the list, factor it in to your final yearly spend so it can form an important part of the equation in your pension calculation.
Get An Accurate Pension Calculation
While a pension calculator can give you a good idea of what your final retirement figure might be worth, nothing beats personalised attention. It’s possible that your pensions aren’t performing as well as they could be. A change of pension provider now could make a huge difference to your retirement when it happens.
If you have any questions about anything pension related, including our pension review service, get in touch. We are here to answer your questions and help you create a wonderful retirement for yourself. You can call for free on 0800 031 6078 or if you would like us to call you, just pop your details into the short form at the top on we’ll get straight back to you.