The Money Guide: Retirement (part 1)
How much do you need to save for retirement?
Here's how to do the all-important calculations
How much do you need to save for retirement? This question is one of the most important ones you need to answer to take charge of your financial future and ensure you retire with enough savings to provide an adequate pension. You should not assume that because you contribute to an employer-sponsored fund, or because a financial adviser has signed you up to contribute to a retirement annuity (RA), that you are on track for a comfortable retirement. The trustees of your fund are likely to recommend how much you should contribute to achieve sufficient savings for you to buy a pension at retirement that is equal to between 60% and 75% of your final salary. The calculation will be based on you contributing to your retirement savings throughout a working life of 40 years, from age 25 to 65. And it will assume you do not cash in your retirement savings. Typically, the percentage of your salary that you and your employer should contribute to your fund will be between 12% and 15% of your gro...