How to know when you have “enough” when saving for retirement


One common issue that many clients have is that it can be hard to know when you have “enough” for your retirement. This can be tricky to resolve, since the answer largely depends on you and what you want.

If you’ve ever struggled with this issue, read on to find out how to know when you have “enough” when saving for retirement.

Knowing when you have “enough” largely depends on what you want from retirement

Saving enough to provide you with a comfortable and sustainable retirement is an important task, as it will have a considerable effect on your lifestyle. However, your attitude towards wealth is just as important as the amount of wealth that you can save up.

For example, let’s say you define having “enough” at its most basic level, which is enough money in retirement to cover your basic needs and nothing else. This bare minimum would guarantee you a life, but it probably wouldn’t be a very enjoyable way to spend your retirement.

Alternatively, you could define “enough” as enough money to pay for your reasonable wants.

This could realistically pay for a nice home, holidays each year, and education fees for your grandchildren. This would be enough to give you a comfortable lifestyle in retirement, but it wouldn’t be enough to let you live out your dreams.

Finally, you could go one further step and define “enough” as having the money you would need to pay for your desires.

This would be enough money to take long holidays to wherever you wish, easily help your children get onto the property ladder, and live out any dream no matter how wild.

This retirement obviously sounds ideal, but it also raises a question: how much work would it take to afford it?

You would probably need to devote a great deal of your working life if you were building up this level of wealth. While you’re doing so, you wouldn’t have as much time to do things in the present that make you happy, such as spending time with your loved ones.

There can be a fine balance between maintaining financial security and enjoying your wealth

As a rule, most people fall into one of three categories when it comes to having “enough”.

The first group are people who have too little to achieve their financial goals. It is likely that they won’t have enough to live the retirement they want unless they make some significant changes to their finances.

They simply don’t have the money needed for a comfortable and sustainable lifestyle, which can cause them significant amounts of stress when they are able to retire.

The second group are the opposite of the first – they have more than enough to meet their financial goals. This sounds like a very enviable problem to have, but it isn’t as ideal as you might think.

The problem that people in this category have is that they often don’t know when they can use the wealth to enjoy themselves in retirement because they’re too concerned about whether they’ll have enough to last.

This can often lead to them not spending their wealth in ways that make them happy, such as taking holidays, out of fear that their spending isn’t sustainable, despite obvious evidence to the contrary.

On top of the obvious emotional strain of this mindset, the high stress can also lead to health conditions such as high blood pressure, which can affect your wellbeing in retirement.

Finally, we have the people whose wealth and attitudes are just right.

This is the ideal, as people in this category don’t need to stress about the fear of not having “enough” and can enjoy their wealth in retirement without the worry that their spending is not sustainable.

Working with an adviser can help your retirement to be comfortable and sustainable

If you want to ensure that you have “enough” in retirement, you need to ask what lifestyle you want to enjoy during it, as well as how much wealth you’d need to afford that.

One of the biggest pitfalls that people often make when asking “How much is enough?” is that they pose it as a purely financial question, rather than one of lifestyle.

This is why it’s important to speak to a financial adviser when planning your retirement. An adviser can help you to understand your retirement goals, so that you can then work with them to find out if you have the wealth to afford them.

Working with an adviser may help you to find out if you have too much or too little, so you can reassess your finances or alter your plans accordingly so you can enjoy a comfortable and sustainable retirement.

Get in touch

If you want to know if you have “enough” to live the retirement you want, get in touch. Please email or call 0115 933 8433.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.