This was a surprise number!

I often talk to people about 'what their number is', this is the amount of money you will need to live on in retirement. People often have asked me how I work it out for them and what's the point of it in the first place so I thought I would blog a little about one client's experience.

This client wanted to know when they could retire as they had hit the 50 plus mark and they were thinking of what standard of living they would have and just as important when they could call it a day!

I use Voyant, this is specialist Cash Flow Modelling software from the US which includes all tax and retirement data from the UK to show how much you have now and what you spend it all on and then it projects this figure into the future to show when you can afford to retire without hitting skid row.

Using this software I showed the client that they could go as early as 57 without losing any standard of living as they had been good savers and they were not a massive spender. We then changed this to age 62 because they enjoyed work enough and just wanted to work less hours.

In a nutshell this client found that the only growth they needed was around 1.92% a year from their existing investments so I simplified them all and put them into risk based investments that don't change the level of risk they take; many funds change risk over time, especially as managers try to cover under performance by additional risk taking. I effectively sacked myself and all future advisors as this client would not need further advice until closer to his retirement, and of course with all the changed options I'm sure I will get the call to go through that minefield with them.

So you can all wonder what you will be able to live on when you retire or you can find out. But remember, for every five years you hold off planning and saving you will need to double the amount you invest. This gets very scary when you hit 50 because you have so little time left for the money to work.

What's your number?