How long you'll need your money to last

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What will your retirement look like?

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In general, we tend to live longer than we think we will. So, when it comes to planning your income, it’s important to keep in mind how long your money will need to last.

Underestimating how long you will need your pension savings to last could mean you may run out of money before you thought you would and have to sacrifice the lifestyle you’d like in retirement.

There’s also a risk to overestimating how long you’ll need your pension savings to last too - particularly if you’re exploring the option of taking a regular income (an annuity). Most annuity providers will base what they offer you, as a regular income, on how long they think they’ll need to provide you with that regular income. If you overestimate, you may not get the best value for your pension savings over the long-term.

This tool is designed to help you plan. It calculates the age you might live to, based on your age, gender, postcode and overall health compared to your age group. This is to help you get an idea of how long you might need your money to last in retirement. A more in-depth version of this will form part of the process for providing you with an annuity quote too, so it’s handy to get an idea of the sort of things it’ll ask, and the answers it might provide.

That being said, this isn’t essential now, it’s another tool to help with your planning at this stage. So, if now’s not the right time, just skip to another page and keep reading.

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Did you know?

Eight out of ten people who are over 50 significantly underestimate how long they’re going to need their money to last.

Source: https://www.thisismoney.co.uk/money/pensions/article-5121863/Eight-ten-50s-underestimate-life-expectancy.html