How to Calculate Your Retirement Savings Needs Easily

By the Editorial Team · Sunday, August 9, 2026

Financial author Bec Wilson proposes a simple method to help individuals estimate how much they need to save for retirement by calculating expenses before and after the state pension age, based on a conservative lifespan up to 100 years. This approach allows retirees to better assess their savings goals, adjust plans accordingly, and avoid the risk of depleting funds during retirement.

Many approaching retirement remain uncertain about whether they have saved enough to sustain their desired lifestyle, a gap that often impedes effective retirement planning and decision-making. Financial author Bec Wilson offers a straightforward method for estimating retirement savings needs, aiming to provide individuals with greater clarity and confidence as they plan their financial future.

Wilson’s approach begins by determining the number of years between the planned retirement age and the age of 100. Though not a prediction of lifespan, this figure serves as a conservative planning horizon to reduce the risk of outliving savings. For example, someone planning to retire at 63 would consider a 37-year retirement period.

The next step involves estimating annual spending during the active, healthy years of retirement. This estimate should include living expenses, travel, home renovations, gifts, and potential financial support for family members. Annual amounts can vary widely, with some individuals targeting as much as £100,000 per year, while others might plan on closer to £30,000.

From this annual figure, the current state pension—£12,547 annually for those with a full national insurance record—should be subtracted. The remaining annual income needed after the state pension age, typically starting around 67 for current retirees in their 50s, is then multiplied by the number of years expected to receive the pension. For the period before reaching state pension age, the full annual spending requirement must be saved, as income from the pension will not yet be available.

To illustrate, Wilson cites a retirement age of 63 with an annual spending goal of £40,000. The four years prior to receiving the state pension would require £160,000 in savings, while the 33 years after state pension onset would require approximately £905,000, accounting for reduced income needs after state pension payments. Combined, this totals just over £1.06 million in retirement savings.

For couples, expenses should be calculated based on the younger partner’s age to ensure savings cover both lifespans. Additional guaranteed income sources, such as defined benefit pensions or earnings during retirement, should be deducted from the annual income requirement. Tax implications should also be factored in to provide a more accurate picture of net income needs.

Wilson recommends comparing these calculations to the “4 percent rule,” which suggests retirees can safely withdraw around 4 percent annually from a diversified portfolio invested in growth assets, aiming to preserve capital over 30 years. For a net annual need of £27,453, this rule implies a required portfolio of approximately £686,000. However, Wilson notes that this figure does not cover the full retirement period to age 100 or the years prior to state pension eligibility, so it should be used alongside the longer-term calculation.

By developing such a personalized savings estimate, individuals can more effectively evaluate their progress, make informed adjustments to their savings strategies, and approach retirement with greater assurance.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.