Ask Google how much money you need to retire and you will get a whole range of answers that will leave you none the wiser. That’s because the answer to the question is different for everybody. There really is no ‘one size fits all’ amount that will give you a comfortable lifestyle in retirement. There is a range of different factors that will influence how much you need:
What kind of lifestyle you want. Some people are quite happy living a frugal life and won’t need as much as those who live the high life.
Whether you own a debt-free home. Having to pay rent or a mortgage is a huge financial burden in retirement.
Where you live. Living in a big city costs considerably more than living in a small rural town.
The type of home you plan to live in. Maintaining an older home can be expensive while a low maintenance, fully insulated home can save you money. Downsizing your home can free up additional funds.
Your state of health and life expectancy. The longer you live the more money you will need. On the other hand, poor health adds to your financial burden
What your travel budget is. Travel is a key expense item for retirement. Frequent trips around the world will require a big budget.
How you plan to spend your time in retirement. A stay-at-home person who just likes pottering in the garden will need a lot less than someone who is involved in expensive hobbies such as golf, classic cars or motor home travel.
Really, the only way to work out how much you will need is to do a budget for your weekly living expenses in retirement and to make a list of all the ‘big ticket’ items you might need money for.