“How much do I need to retire?” is the question almost everyone eventually asks, and the honest answer is that there is no single number that applies to everyone. It depends entirely on the life you want to live once you stop earning an income, not on a round figure someone else settled on for a different person in different circumstances.
Start With Your Real Expenses, Not a Guess
A more useful starting point than guessing at a target is looking at your current monthly expenses and asking which of those actually change in retirement. Some costs fall away, commuting, work clothing, retirement annuity contributions themselves stop once you’re drawing an income rather than building one. Others increase, particularly medical costs as you get older and healthcare needs grow. From there, a proper retirement plan works backward from your realistic target monthly income to figure out what needs to be saved and invested today to sustain that income for the rest of your life, however long that turns out to be.
The Variable Most People Underestimate: Time
Retirement isn’t a single date on a calendar, it’s a period that can realistically last 20 to 30 years or longer given current life expectancy. Your investment strategy has to account for that entire stretch, not just the day you stop working, which means the plan needs to keep working long after the pay cheques stop arriving. This is one of the places where how your investments are structured matters just as much as how much you’ve saved, a portfolio positioned too conservatively can fail to keep pace with decades of inflation just as easily as one positioned too aggressively can suffer a poorly timed downturn.
Different Starting Points Need Different Plans
Whether you’re just starting a retirement annuity in your thirties, consolidating several old preservation funds left behind from previous jobs, or already retired and actively managing a living annuity, the underlying question is the same but the plan looks completely different depending on where you’re starting from. Someone in their thirties has time as their biggest asset. Someone already retired needs a plan built around drawing down sustainably rather than accumulating further. A plan built around someone else’s numbers, or a generic average, isn’t built around yours.
The Role of Preservation Funds and Old Policies
It’s common to reach your fifties with three or four old retirement annuities and preservation funds scattered across different providers from different employers over the years, each with its own fee structure, fund choice, and performance history nobody has reviewed in a decade. Consolidating and reviewing these isn’t just administrative tidying, it directly affects the fees being paid and whether the underlying investments still match your actual timeline and risk tolerance today, rather than the risk tolerance you had when the policy was first taken out.
What a Retirement Review Actually Looks At
A proper review looks past the current balance and asks harder questions: is the underlying investment strategy still appropriate for your remaining time horizon, are the fees reasonable relative to what’s being delivered, does the projected income at your target retirement date actually match what you’ll need, and is there a plan for how income gets drawn down once you stop contributing and start withdrawing.
Protecting the Plan Itself
It’s also worth remembering that a retirement plan depends on your ability to keep contributing to it until you get there. That’s part of why risk cover and retirement planning tend to get reviewed together rather than in isolation, a strong plan that assumes nothing will interrupt your income for the next twenty years is only as strong as the protection sitting underneath it. This is also where a coordinated investment strategy matters, since retirement is, for most people, the single largest investment goal they’ll ever plan around.
Living Annuity or Guaranteed Annuity: A Real Decision, Not a Formality
When you actually reach retirement and need to convert savings into income, you’re generally choosing between a living annuity, where you retain control of the underlying investment and draw down an income within regulated limits, and a guaranteed annuity, where an insurer pays a fixed income for life in exchange for the capital. A living annuity offers flexibility and the potential for the capital to keep growing, but carries the risk of drawing down too quickly or the underlying investments underperforming. A guaranteed annuity offers certainty but locks in the rate at the time you purchase it and generally can’t be adjusted afterward. Neither is universally correct, the right choice depends on your other income sources, your risk tolerance in retirement, and whether you have other capital to fall back on if markets move against you.
Reviewing a Plan That’s Already in Motion
Retirement planning isn’t a single decision made once in your thirties and left alone. Contribution levels that made sense five years ago may no longer be enough given salary growth, changed goals, or a revised retirement date. A plan that was never reviewed after being set up is often quietly drifting away from the outcome it was originally built to achieve, simply because nobody checked in on it as circumstances shifted.
Book a consultation with Renney to talk through your retirement plan.
