Calculating your pension: Math, magic, or something else?
Chances are, you know you need to save for retirement. And now you’ve taken the first step by asking, “how much do I need to save for retirement”? The problem is that the answer to this question is very subjective. It depends on so many factors, from how old you are to what sort of lifestyle you live - and even how long you might live.
To find out how much you really need to put away each month for your retirement, your best bet is to sit down with a calculator and try and work it out. This can become quite complicated as you’ll need to factor in predicted investment growth, your cost of living, and so much more.
As we like to keep things simple at Wealthify, we’ve created a pension calculator. And, unlike any other calculator, we factor in our forecasted pension investment performance and can even include pensions you want to transfer to us. Whether you’re 18 or 81, our pension calculator can help you get an understanding of what you need for retirement.
Try Our Personal Pension Calculator
There are a few different types of pensions in the UK, and working out your State Pension is a little bit different to a personal pension, as the amount you receive is set and determined by your National Insurance contributions. Because of this, we can easily include your State Pension allowance within our personal pension calculator, giving you a much better idea of how your retirement could look.
To start using our calculator, all we need to know are a few basic personal details, how much you plan on saving each month, how much you already have in your pensions, and when you’re thinking about retiring. We can even include the tax relief on your monthly contributions, showing you exactly how much money you could have when it comes to retiring.
Life is full of ‘what if’ moments, so we’ve gone ahead and answered some of the ‘what ifs’ you could have when paying into your pension. For example, what if you saved £10 more a month into your pension? Or, what if you retired at 60 instead of 57? How about: what if I chose an Ethical Pension instead of the Original Option?
With our pension calculator, we can give you a much better idea of how these changes might pan out. Obviously, we can’t see the future, but we do carry out a lot of forecasting based on a wealth of market and industry data, with a thorough analysis to give us an idea of what we may expect to see.
When using the calculator, you can choose how high risk you want your pension to be – there are five investment styles to choose from, ranging from Cautious to Adventurous. Our pension calculator will show different outcomes for each of these investment styles because they’ll each contain a different mix of investments - and therefore, the market movements for each of them wouldn’t be the same throughout your retirement journey. The same is true for our Ethical and Original themes, with the forecasts differing depending on your choices.
The hard work is done for you
Instead of trying to figure out what percentage of your income you need to tuck away each month, why not give our pension calculator a spin? You may be pleasantly surprised (or slightly worried) at how much you might need to save for a comfortable retirement - but then at least you’ll know, right?
If knowledge is power, then our pension calculator is designed to give you enough power to kick your retirement plan into action. Why not give it a go?
Your tax treatment will depend on your individual circumstances and it may be subject to change in the future.
The projected values include the impact of fees and any fund charges. The projected values show the possible future value of your Plan in different market conditions. These are only forecasts and not a reliable indicator of future performance.
With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.