Can I retire at 55 with £300k? How long will it last?
It’s the dream. Early retirement. A stack of cash in the bank. An exciting and colorful bucket list of a million different treats to enjoy.
But in reality, how much does early retirement cost? In this blog post, you will learn facts about how much you would need to consider towards your retirement and also access a download of our FREE E-Guide on Pensions & Retirement.
Popular Question: how much does early retirement cost?
It depends. The short answer is, yes. It is possible to retire at 55, and the average life expectancy is around 87, then £300k will need to last you a good number of years but is it enough? The real question is: will you want to? If it’s your only source of retirement income, then you are going to have to budget to make it last. And if you want more flexibility as to how much you will have after retirement, then, you will need to speak to a pension or retirement specialist.
If you are contemplating retirement at an early age like 55 with £300K in your pension pot, then there are 4 important questions worth asking yourself:
- How much money do I need per annum?
- Is my pension pot my only source of income?
- What are my retirement lifestyle goals?
- How long do I need £300K to last?
You need to do your homework before you conclude.
Have you sat down and perhaps worked out the costs of your retirement and the lifestyle you would want to maintain? What are your financial obligations and expenses? Consider these both now and in the future.
You generally need more money when you retire younger and are more active (mortgages, dependent kids, hobbies, and sports, etc.) Costs then reduce later because of your mortgage-free 60’s & perhaps kids now being out the nest. Then rise again later due to costs such as increased insurance, medical and medical care costs. In short, your retirement outgoings & obligations should fluctuate.
How Long Do I Need £300k To Last For?
This is the million-dollar question. No one knows how long they are going to live and no one surely knows what life is going to throw at them. Generally speaking, if a £300K pension pot is your main & only source of retirement income then how you plan to utilize it will be extremely different to someone who is simply using their £300K as a ‘top up’ fund.
Fortunately how long £300k will last you in retirement depends on you. Lifestyle is significant when considering your retirement and its cost. Lifestyle should be your starting point. If you retire at 55, and the average life expectancy is around 87, then 300K will need to last you 30+ years. A comfortable retirement for a single person costs around £20,000 per year. This includes things such as travel/holidays, buying new clothes, and recreation/leisure.
Retirement planning is not as simple as picking an arbitrary figure out of thin air and thinking ‘Yeah, I could live on that. It should be about precise calculations and an in-depth look at the life you lead currently, and the one you aspire to lead in the future. Speaking to one of our trained retirement specialists will help light the way for you; it’s our job to make your assets work efficiently for you.
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