Plan the income, not only the lump sum
Start with expected spending, other income sources and the portion that needs to come from retirement savings.
05 · Retire
Retire with an income plan
Retirement planning connects the life you want, the income it requires and the capital available to support it. It should be revisited as markets, tax and personal circumstances change.
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Three principles for retire
Allow for inflation
Retirement can last decades. An income that does not grow may buy materially less later in life.
Use a sustainable withdrawal
The appropriate rate depends on age, investment mix, flexibility, longevity and whether income is guaranteed or market-linked.
Practical starting point
Four useful next steps
- 1
Estimate essential and flexible monthly spending in retirement.
- 2
List pensions, annuities, rental income and other expected income.
- 3
Use the retirement calculator to test saving rates and assumptions.
- 4
Review investment risk, beneficiaries, estate documents and medical costs.
Common questions
Questions about retire
What is a replacement ratio?
It is retirement income expressed as a percentage of salary before retirement. It is a useful planning shortcut, but a detailed spending budget provides a more personal target.
Is a 4% withdrawal rate guaranteed to work?
No. It is a planning assumption, not a guarantee. Actual sustainability depends on returns, inflation, fees, tax, longevity and how spending changes when markets are weak.