How to plan for retirement
Retirement planning involves estimating how much money you need to maintain your desired lifestyle after you stop working. The key factors are your current savings, how much you contribute monthly, the expected return on your investments, inflation, and how much income you'll need in retirement. Starting early gives your money more time to compound, significantly reducing the monthly contribution needed.
The impact of inflation
Inflation erodes the purchasing power of money over time. A monthly income of £3,000 today might need to be £5,400 in 20 years at 3% inflation to maintain the same standard of living. Our calculator accounts for inflation by showing both the nominal savings amount and its inflation-adjusted (real) value, giving you a realistic picture of your retirement readiness.
Surplus vs shortfall
After calculating your projected savings and desired retirement income, the calculator shows whether you'll have a surplus (more than enough) or a shortfall (not enough). If there's a shortfall, consider increasing your monthly contributions, extending your working years, adjusting your expected lifestyle, or seeking higher-return investments. Even small increases in monthly savings can make a significant difference over decades.