How to read your results
Our calculators will always be as truthful as you are, but at the same time flexible enough to let you find a no-nonsense solution.
Start by deciding what retirement income you would like. Then enter your known pension benefits and savings. As soon as you start entering information your graph will start building results.
State Pension and any other fixed incomes will show in BLUE, these are the foundation of your lifetime income. Top-up these with with money from pensions, ISAs and other savings. The calculator will convert this capital into income and show them in ORANGE.
The result depends on whether your choice of income is realistic. If these savings run out early, perhaps your choice of income is too high. But the calculator still has more adjustments, so you can end with a credible plan.
the colours
Fixed Income
Top-up income
Investment value
Each bar of your graph is one year, hover on a bar to show each year’s future income
Income
Top-up Income in orange
This money from your portfolio of pensions and investments that don’t offer a guarantee, for example; personal pensions, SIPPs and ISAs. Each year you draw enough money from here, to fill the gap between fixed incomes and your spending needs.
Fixed Incomes in blue
Guaranteed to last your lifetime. This is the foundation for your long-term income. Dependable, regular and stable, they include your state pension/s and other guaranteed incomes.
Investment
Investment value
Green shows the performance of your Top-up investment portfolio, used to pay top-up income. This example shows the value depleting quickly and it’s the result of a higher annual income withdrawal than the investment can support.
Your retirement plan will show your own personal Rate of Income Withdrawal.
Meet Simon and Serena
Simon is 63 and Serena 59 and they plan to retire when they each reach 65. Their income need is £35,000 a year, increasing annually to cover their regular expenditure. Both have a full state pension at age 67, £130,000 each in SIPPs with £40,000 each in investment ISAs. They can set-aside about £75,000 in other savings for emergencies outside regular income. Their plan should provide for their income need until age 95.
Example - if the result is an income shortfall
Income
This example shows how they might run out of money too soon. It’s because their top-up investments only last until Simon is 94 and Serena 90. After that, they only have state pensions and any remaining savings to live on. Finally, with Serena being younger she is assumed to live longer than Simon, so she loses Simon’s state pension in the last years.
Why the shortfall?
They are either retiring too early or planning an over-optimistic income. Their investment portfolio shown as orange bars, needs to last until both reach their planned age of 95. They could increase savings, but in this case may not have enough time left.
Investment value
Their investment graph confirms their Rate of Income Withdrawal too high to sustain their income. Reducing their income will stop this rapid fall.
Fortunately, the planner shows this in advance and they can do something about it before it happens.
Solutions
By reducing their income to £30,000 the picture changes
Retiring before the state pension age is always costly.
Retiring later would also solve the problem, or some part time work would also defer the need to draw from their savings.
There will be £160,000 left in the investment pot in the last year, so they have a little flexibility, but still with a fast decline in value towards the end.
It’s important not to depend on one single projection, no one can accurately predict your long-term future, because your needs, as well as outside influences continue to change. Go back to the plan every year, make any adjustments to remain on track. Always keep enough Set-aside in savings to fall back on.
Detailed results table
Here is a look behind the graphs, you find this at the foot of your joint or single planning page.
The table details each type of income for every year into the future.
