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How to fund your retirement until age 100

Journalist: Marc Shoffman, Freelance

ended 11. January 2024

 I am writing a peice for MoneyWeek looking at ONS data showing record numbers of people are living to age 100.

I am keen on comments from financial planners/pension experts on how much pension you need to live to a hundred and how to get there please.

Is living so long factored into products such as annuities/overall financial and pension planning?

Kind regards

Marc

3 responses from the Newspage community

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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Unfortunately, there's no single answer to this as everybody is different in terms of what they would like to live on in retirement and their preferred pattern of expenditure.

We often encourage our clients to consider spending more in the early years of retirement while they have health and time on their side, as although they may still be alive in their 80s and 90s; the ability and appetite to do things is inevitably less. We all get too old to enjoy ourselves at some point!

It's important to model what this would look like as part of a proper financial plan to find a nice balance between spending too much or spending too little. Once the desired outcome is known, we can work backward to look at what realistically needs to be done to get there ie. how much to save/invest, at what growth rate, with enough wiggle room to deal with the known unknowns. It's then a case of reviewing things to ensure they remain on track.
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Nick Lincoln
Director at Values to Vision FP
1) Work out your Lifestyle cost per annum eg £50,000 net.
2) Pick an estimated inflation rate and work out what this number from point one will be at your chosen Financial Independence Day (FID, also known as "Retirement")
3) Divide this new number by 4%
4) Save enough between now and FID to hit this number. Pension, ISA, whatever. Saving 100% into The Great Companies of The World (equities) is the safest, cheapest route. Use your pension and ISA allowances first.
5) Review steps 1-4 annually to make sure you're on target.
6) Otherwise, figuratively stare out of the window over the decades between now and FID and DON'T MUCK ABOUT WITH THE PLAN.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
When we plan for our clients futures, our default assumption is that they are going to live to 100. We work with them to calculate how much their life costs, including all things they still want to do e.g. regular travel, theatre vistis etc. We then use certain assumptions for inflation, investment growth etc to work out how much money they are going to need for the rest of their lives. Using all the information we have about their existing pensions, investments, properties etc, we can work out how much money they need to put aside to achieve their goals. It is something we revisit every year together to make sure they are always on track, as life will always change.