Retirement Calculator

💰 What is Retirement Planning?

Retirement planning is basically figuring out how much money you'll need to live comfortably once you stop working, and then working backwards to see what you need to save now. It's not just about having a pension – it's about having enough income from all sources to maintain your lifestyle (or upgrade it!) when you're no longer earning a salary.

The magic happens through compound interest – your money earning money, which then earns more money. Start a 25-year-old saving £200/month at 7% growth, and they'll have £525,000 by 65. Wait until 35 to start? Only £263,000. That decade costs them £262,000. Mad, right?

🔑 Key Retirement Components

• State Pension: Government safety net (currently £203.85/week full rate)
• Workplace Pension: Your employer chips in (don't miss free money!)
• Personal Pensions/SIPPs: You control the investments
• ISAs: Tax-free growth (£20k/year limit)
• Property: Rental income or downsizing equity
• Other Investments: Stocks, bonds, business income

⏱️ Why Starting Early Matters

Time is your secret weapon. Someone saving £100/month from age 25-35 (just £12,000 total) will have more at retirement than someone saving £200/month from 35-65 (£72,000 total). That's compound interest working its magic – your early contributions have decades to grow.

• Age 25 start: £200/month = £525,000 by 65
• Age 35 start: £300/month = £394,000 by 65
• Age 45 start: £500/month = £307,000 by 65
• Every year you delay costs you thousands

📊 Planning Your Retirement Timeline

Your 20s-30s: Start with anything – even £50/month. Maximize employer matching (it's free money!). Focus on growth investments. You've got time to ride out market bumps.

Your 40s: Increase contributions as your salary grows. Aim for 15-20% total savings rate. Start thinking about your retirement lifestyle and costs.

Your 50s: Catch-up time! Use higher contribution limits. Start shifting towards more conservative investments. Plan for potential career changes.

Your 60s: Fine-tune your withdrawal strategy. Consider when to claim state pension. Plan your first few years of retirement spending.

🎯 Common Retirement Mistakes

• "I'll start next year": Each year costs you thousands in compound growth
• Underestimating expenses: Most need 70-80% of working income
• Ignoring inflation: £1,000/month today = £500 buying power in 30 years
• Being too conservative: Cash loses to inflation over decades
• No emergency fund: Don't raid retirement for emergencies
• Forgetting healthcare: Costs often increase with age

💡 Smart Withdrawal Strategies

• 4% Rule: Withdraw 4% of starting balance annually (adjust for inflation)
• Bucket Strategy: Short-term cash, medium bonds, long-term stocks
• Tax-Efficient Order: Use tax-free allowances first
• Flexible Approach: Spend less in bad market years
• Pension vs ISA: Balance taxable and tax-free withdrawals