How much is enough to retire?
It’s a tough question to answer. None of us really know how long we’ll live or what spending demands will be placed upon us during retirement, which could last many decades. Then there’s the unpredictability of financial markets which will also partly determine how our savings will grow over the years leading up to retirement.
With all that uncertainty, a target level of saving that would give you a decent standard of living in retirement would be a great thing to have. It wouldn’t make hitting your target any easier, but it would allow you to know in good time how you’re progressing and to make changes along the way to improve your chances.
With that in mind, Fidelity has worked to produce three retirement rules of thumb which can help you understand how much you’ll need to enjoy a retirement that meets your expectations.
The power of 7
Fidelity’s research found that UK households who manage to save seven times their annual household income by the age of 68 should be able to retire and maintain a similar standard of living as in their working life.
This assumes that the household will include two people, both of whom are entitled to a full state pension.
While a goal of seven may sound challenging, the key is to start as early as possible and aim to meet a series of savings milestones along the way. Our analysis suggests UK households aim to save at least one times their annual income by the age of 30 to begin their retirement journey.Discover the power of 7
Helping you transition into retirement
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