How much does retirement cost?

When asked, our clients are often not sure just how much is enough for them in retirement. Broadly speaking our clients fall into one of three spending categories: Modest, Moderate and Luxury. Please note that of course everyone is different – tastes, interests and desires vary tremendously.

Are these spending numbers about to change?

With the recent onset of high inflation the answer to this is ‘yes’. Certain expenses have increased noticeably – gas, electricity, fuel, car hire costs immediately spring to mind.

Of course, what resources you have is a major factor in determining what you spend in retirement. Not all of the above expenses need to be paid for monthly, from retirement income. For a more balanced retirement you need a regular source of income plus capital.

At Holland Hahn & Wills we regularly talk about the ‘Three Buckets’ approach to capital:

With this approach you use cash in bucket 1 to cover one-off large costs, plus investing capital away in equity-based funds (bucket 3) in order to offer a hedge against inflation. As bucket 1 becomes depleted you move money from bucket 2, and then move money in turn from bucket 3 to maintain the balance.

Because life is constantly changing, we believe that creating a financial plan and reviewing this at least annually, is the best way to reduce risk and worry over the long term.

At Holland Hahn & Wills, we believe that creating a long term cashflow forecast, taking all personal information into consideration is the best way to plan for the future. A conversation with a financial planner is recommended to help you make the right financial decisions. A conversation with one of our financial planners could help with these important decisions, or provide a second opinion on the way your own wealth is managed.

Please get in touch – an initial chat is free, with no obligation and could save you a lot of worry.

Holland, Hahn & Wills
020 8943 9229 | enquiry@hhw-uk.com | hhw-uk.com

This article is for information purposes and should not be treated as advice. Individual circumstances should always be considered prior to purchasing any financial products. Investing involves risk – the value of investments and income from them may fall as well as rise and is not guaranteed.