How much do I need to save for retirement? 🤔
In this second instalment of Brian’s no-nonsense top-tip videos, he’s breaking down how we can figure out how much we need to save for retirement.
The save half your age rule
When setting a savings goal for retirement, the ‘save half your age’ rule of thumb is a good place to start.* By this rule, you take the age at which you start saving for retirement and divide it by two. Then you’ll aim to save that percentage of your gross salary (before taxes and deductions) each year. So if you start saving at 30, you should aim to save 15% of your salary per year.
We know this isn’t always achievable though – life isn’t always straightforward! But any savings you can make – no matter how small – will benefit from compounding over time.
Ultimately, what you should aim to save depends on your personal circumstances, and how you see your future self living at retirement age. Ask yourself these three questions:
- What can I realistically afford to save?
- What kind of lifestyle do I want to have?
- Do I want to continue working in some capacity or stop completely?
Work it out with the Pension Calculator 🎯
Find out what you need to save to reach your retirement goals using our handy Pension Calculator. Simply enter a few details, such as your age and target retirement age, and the calculator will crunch the numbers for you! It’ll show you what your pot’s currently on track to be worth, plus best next steps to help you reach your goal.
Tax treatment depends on individual circumstances and is subject to change. As with all investing, the value of your pension can go up and down, and you may get back less than you invest.
Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to 57 in 2028). We do not currently offer drawdown products for the Moneybox Pension.
When deciding whether to transfer your pension, it’s important to compare the charges, investment options & benefits between Moneybox and your old provider. Moneybox cannot accept a transfer from a pension your employer is currently paying into.
If you’re not sure whether the Moneybox Pension is right for you, you may want to contact a suitably qualified financial adviser for help.