Before you start to plan how you are going to fund your retirement, it's worth spending some time thinking about your retirement budget. That way you establish what your minimum income requirement will be. After all, no one wants to be left in a position where they run out of money!

Working out your monthly expenditure is the best place to begin.

This tool does take some time to complete, but it's important to invest this time so that your planner is as accurate as possible. And you can print out your results afterwards to refer to later on.

Using the tool

* Start by entering your age and current state of health*. Then add each source of income separately. This may include:

o Your State Pension

o Any other pensions

o Investment income

o Buy-to-let income

o Any income that you will earn from employment

* Then add your costs. For each item that you add, you'll need to decide whether it is an essential cost or not. You can also set costs to stop at a future date (such as when you have finished paying off your mortgage), or you can add future costs

* The budget planner will then split all of your costs into essential and non-essential items

* It then calculates what money you will have left over, or the shortfall that you need to top up in order to enjoy your retirement. It displays this for you visually

* It will also show you how likely you are to live to different ages, depending on how you rated your health, so that you have a good understanding of how long you need to plan for.

Please bear in mind that the results are based on values today: calculations have not been adjusted to take inflation into account. Nor can we allow for future changes to taxation and legislation.

Longevity Calculator

It would be nice to have a crystal ball, to tell us how long we need to plan for in retirement. But the truth is no-one knows for sure how long we’ll live.

What we do know is that, on average, we're all living longer; and the last thing anyone wants is to run out of money in retirement. Our Longevity Calculator can give you an indication of how long you may live, based on your age and the quality of your health. It's based on complex data from the UK Pensions Industry** – but it's important to know that your results aren't set in stone – they are just an indication of how long you may live.

* These definitions will help you assess your current state of health:

Good health – might mean that you don't smoke; don’t drink excessively; are a healthy weight; proactively look after your health and that you are not currently on any prescribed medication to help control a specific condition.

Average health – might mean that your current health isn't perfect, but you aren't suffering from any serious long-term illness. Typical things that might put you in this group include being slightly overweight, drinking more than the recommended number of units of alcohol on a regular basis; high blood pressure; high cholesterol; or you may be taking medication for these or similar conditions.

Poor health – might mean that you have had a more serious illness or risk factor. For example, you may have had cancer, or previously suffered from a heart attack or stroke, or you may have a condition that is difficult to manage, like diabetes.

**The Continuous Mortality Investigation (2015)

Pensions are a long-term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change therefore the tax treatment of pension benefits can and may change in the future.

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