Am I on track to retire comfortably?

Clients often ask me if, for their age, they are on track to retire comfortably.

It is a hard one to answer as everyone has different circumstances but here is the rule of thumb.

Say you income is £50,000 per annum and you want to retire at 67 on the same income that you are on now, the milestones you need to aim for are as follows:

Aged 30, 1 year's income, so £50,000.

Aged 40, 3 year's income, so £150,000.

Aged 50, 6 year's income, so £300,000.

Aged 60, 8 year's income, so £400,000.

Aged 67, 10 year's income, so £500,000.

People under-estimate what they need to do and put off saving. The best time to start saving was yesterday, the second best time to start saving is today.

I have financial adviser colleagues who only give advice on lump sum investments. Very few people of working age ever get given lump sums to invest, so you need to take responsibility for your retirement by setting up automated savings into pensions and ISAs.

The above rule doesn't take into account factors such as early retirement, final salary pensions and the state pension. This is why we use retirement shortfall analyis software to give you a more thorough indication.

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