Estimating your retirement spending

Spending moves a plan more than almost any other figure, and no statement hands it to you. One place to start is what you spend now, adjusted for what retirement changes.

1. Add up a year of what goes out now. Bank and card statements show it better than memory does.
2. Take out what stops at retirement, such as pension contributions and travel to work. A mortgage or loan has its own place in Edit plan, so it stays out of spending.
3. Add what retirement brings. More free time often means more travel and leisure in the early years.
4. Enter the result as a spending phase, in today’s money. A second phase can start where you expect the pattern to change, and a large single cost is a one-off event.

Where your own accounts are out of reach, the Retirement Living Standards describe three levels of retirement spending, Minimum, Moderate and Comfortable, for households of one and of two. They are spending after tax. Under Planned spending on the plan page, ‘Is this enough?’ sets your own figure beside the three levels for your household. It also shows them in the money of the year you retire, and what a plan that runs short pays for.

They assume the home is owned outright. They leave out rent, mortgage payments, care, dependants and pets, which come on top wherever they apply.