What is a retirement calculator?

What is a retirement calculator? I’m lucky enough to not have to worry too much about retirement anymore! I bring in a steady and stable income month that is more than enough to live on.

I’m a huge supporter of Financial Independence. I love to keep up to date with all the different ways in which people strive to retire early. Most people still assume that working the 9 – 5 day job gives them security. Thus guaranteeing them a pension at the end of their 40+ years of service.

Thanks to modern-day society this isn’t actually the case and our retirement age is also constantly changing. I’m going to be exploring everything retirement in this post along with what is a retirement calculator.

When can I retire?

Gone are the days of simply counting down the years toward your retirement and the state pension. The government are more than happy to let people carry on working past retirement age. official guidance stating:

You can keep working past your State Pension age.

You can usually work for as long as you want to. ‘Default retirement age’ (a forced retirement age of 65) no longer exists.


Not very helpful if you aiming for an nice early retirement! Its no wonder the FIRE movement is gaining such popularity!

The government do provide a state pension age checker. Simply input your date of birth, they will helpfully provide you with the year you can retire along with how old you will be. If your wondering currently we are all working till we are 68!

How much do I need to retire?

After the calculations above, it should be apparent now that we can’t really rely on the government. They move our state pension age until it becomes obvious that we are working until we are dead!

Back in 2015’s Pension Reform Consultation paper explained why it felt the need to reform our pensions. It states that “it should encourage people to save enough during their working lives to meet their aspirations for a sufficient standard of living in retirement”

The FIRE movement of how much you need to have in order to retire is 25 times your annual spending. Its important not to use your salary as this figure as it is inaccurate and lots of people spend over or under the amount they actually make.

Let’s explore this further – If your a couple with no kids and your annual spending is £25k a year. Time this by 25 gives £625k. This is the pot of money that you need to have in order to retire.

The more you save the faster you get to this target so if your able to live fairly cheaply now then you can reach your target faster.

It’s useful to know that the average weekly income for those receiving state pension in 2017/2018 was just £304 a week after taking out taxes and housing costs.

Using a retirement calculator

A retirement calculator is a great way to see how much income you will need in retirement. Whilst it might be fairly scary to see how much money you are currently short by, its a great incentive to kick your savings and investments into gear (or start if you haven’t yet).

There are quite a lot of dfifferent types of pension/retirement related calculators out there so its useful to have an overview of them all:

Retirement Calculator by Fidelity – This is a decent place to start. You simply increase or decrease its pre-set category expenses and it gives you an overview of how much your lifestyle would cost per yer. You can toggle things like holidays, eating out and shopping trips and it is automatically updated against your yearly amount.

It doesn’t just leave you there to stew wondering how the heck you can afford to live after 70, it takes you through how you would get there depending on your current savings, earnings and investing style (if you have one)

Its a great place to get started but don’t go overboard as there main aim is to get you to use there services.

Pension calculators are also another great place to see where you are, where your headed and what you need to do to get there. The money advice service goes into more detail regarding your current pension (if you have one) and requires details like your lump sum amount and your current national insurance contributions. You can check your NI contributions on the government website.

After checking these, Moneyed’s FIRE calculator is the next point of call to see your FIRE numbers. Remember that this is just an overview. I know my numbers and they are nowhere near the cool one million I’ve been quoted here!

Playing with fire’s calculator is perfect if you already have all your assets and liabilities organised. It allows you to input your current net worth0, asset allocation plus your expected rate of return.

Ways to retire early

If all the above calculators have scared you into submission then be assured your not alone! The best way is to take action if you are further away from your goals then you would like.

  • Cut Expenses
    Simply put the less you spend the more you can save. If you reduced your expenses by £100 a month then this would mean you put an extra £12,000 in your savings over 10 years. If you can learn to live on your new budget then it also lowers the amount you will need for retirement as you have reduced your yearly expenses.

    Cutting your expenses gives you more money to invest and this ultimately speeds up the accumulation of your assets so you reach your retirement target.
  • Increase your income
    This site is basically a list of ways to increase your income but I’ll add a few more here just for good measure:
    Matched Betting
    Affiliate Marketing
    To name but a few!
  • Invest
    With more money comes the potential to increase your investments and live off the returns. I have written a post on Online Investing.

No time like the present!

Planning for your retirement doesn’t have to be all doom and gloom. I highly recommend using a retirement calculator and then mapping out a plan of where you want to be and how you are going to get there!

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