economy
10 numbers you need to know if you’re planning your retirement
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
TL;DR
- Average longevity for a 65-year-old is 85, but planning for longer is advisable.
- A 3.8% median withdrawal rate is observed for larger pension pots, suggesting a sustainable drawdown.
- The target replacement rate (TRR) for a comfortably-off Briton is 50% of working income.
- The state pension provides a significant portion of income for retirees, particularly single individuals.
- Divorce can significantly impact pension wealth, especially for women, highlighting the need for joint financial planning.
- The minimum auto-enrolment contribution rate of 8% is insufficient for a comfortable retirement.
- Inflation erodes the purchasing power of savings, making real returns crucial to assess.
- The financial risk of long-term care home costs is relatively low for most individuals over 65.
- Median residual wealth at age 90 is 60%, suggesting opportunities to pass on assets earlier.
- Happiness scores tend to increase after age 65, indicating that financial success is not the sole determinant of well-being in retirement.