What is a good pension pot at 60?

Published 03/01/2022

What size pension pot do I need?

Often described as “the longest holiday of your life”, retirement sounds very attractive. But can you afford to pay for the holiday?

Our clients often ask questions such as “What is a good pension pot at 60?” This is clearly a question at the forefront of people’s minds. A recent study showed that 69% of over 50s are concerned about not having sufficient income in retirement.

Most people undervalue the level of income they require in retirement. It is safe to assume that you would like to at least maintain your current standard of living. Just because you have stopped working, doesn’t mean you should sacrifice your multiple cars, expensive holidays and frequent meals out. If anything, your spending will most likely increase because you have more free time in which to spend your money.

The simple solution to concerns surrounding retirement income is to work longer than you had planned for. This doesn’t always need to be the case and is most likely down to a lack of financial plan or forecast.

Financial planning is crucial for all periods of your life, but none more so than in the years leading up to and following retirement. Identifying your goals early and creating a plan to reach them is imperative. Reviewing your plan regularly is also vitally important to ensure you are still heading for the retirement you desire.

How much is enough to retire?

Even though it would make life more simple, there is no magic figure that is immediately considered ‘enough’ for a long and happy retirement. The amount entirely depends on you. Let’s look at two examples to demonstrate this:

  • Client 1 is 55 years old and looking to retire at age 60. They have earned over £100,000 for most of their career and got used to an affluent lifestyle which they want to maintain in retirement. Their mother is unwell and requires long term care which client 1 pays for.


  • Client 2 is 62 years old and looking to retire at age 65. They are on a modest income of £40,000 per year and lead a simple but happy life. Their 2 children are grown up and financially independent.


Will client 1 and client 2 require the same amount of money to retire on? No, the sums they consider ‘enough’ will be vastly different due to their differing spending patterns and length of retirement.

There are many factors that determine how much is enough for you to retire. These include:

  1. Estimated expenditure
  2. Longevity
  3. State pension eligibility
  4. Other sources of income
  5. Dependents and legacy
  6. Investment strategy

Understanding each of these factors and combining them to find your magic number is very difficult. Especially when there are variables such as:

  • Inflation
  • Investment growth
  • Interest rates
  • Taxation laws
  • Unexpected changes in your situation

How can you help me make a retirement plan?

The first stage of producing your retirement plan is to analyse your current situation compared to your dream retirement. We will then use the 6 factors previously listed to see how your retirement will look if we made no changes. If you are on track, that is great and we will ensure we review the plan every year. If changes are needed, we will work with you to find the gaps and consider the optimum ways to put you back on track.

Estimated expenditure

As mentioned above, one of the factors is your estimated expenditure. You can start crunching the numbers using our interactive expenditure form. Simply fill in how much you spend for each category and then click the Submit button to email the form to us. We can then add these figures into our software along with the rest of your information.


We believe it is always wise to plan for the worst-case scenario, as there are many uncertainties in life. When it comes to living a long time, it is wrong to call this a worst-case scenario, but in terms of your finances we ensure you are not going to outlive your money. That is why we go further than using ONS Life Expectancies, and use assumptions based on your current age and state of health. Since your plan is reviewed every year, we can tweak your plan later on if needs be.

State pension eligibility

Although insufficient to be the only source of retirement income, your state pension makes a significant difference to your overall income strategy after retiring. Therefore, it is important we have an accurate idea of your state pension eligibility. We can help you in finding this out using the online service on the Government website.

Other sources of income

It is very common for retirees to have money coming in from other areas apart from pension drawdown and state pensions. This could be withdrawing money from your ISA, or may be rental income. No matter your situation, we will take everything into account to ensure your forecast and plan is as accurate as possible. This way, we can make sure there are no surprises further down the line.

Dependents and legacy

dependants and legacy We all have loved ones that sadly we will one day leave behind. For many of us, we would like to make sure our family receive some inheritance to enjoy and help them achieve their own life dreams. This may be money for your grandchildren for their tuition, or valuable cash for your children to upgrade their homes. You can let us know how much you would like to leave behind and we will factor this into your plan. Similarly, if you would rather spend everything you have, that can be calculated too.

Investment strategy

If you already have an investment strategy that is working for you, we can build that into your plan and our software will use over 100 years of real investment returns to estimate your potential investment growth throughout the life of your plan. This is clearly very difficult to get accurate, so you will see hundreds of possible outcomes that are grouped into likely, rare, best and worst. In the middle you will see your median outcome that is the most likely.

Should you be looking to review your investment strategy, we can do that too. Our investment review service is comprehensive and involves a full analysis of your risk profile including attitude to risk and views on socially responsible investing. We will then compare potential alternative portfolios to your existing strategy and work with you to find the perfect match for your plan. Find out more here.

What does a retirement plan look like?

We believe that clients should have very clear outputs from their cashflow forecast. That’s why we provide a number of graphs and figures that relate to your everyday life. Retirement is already a confusing time without your financial plan making matters harder to understand.

You will be given two important documents as part of your retirement plan:

  1. Retirement Policy Statement
  2. Income Sustainability Review

Retirement Policy Statement

This will briefly detail the inputs that you have provided to us, such as your income sources and expenditure. It will also include any goals or large one off expenditures you have told us about. You have a chance to read this and let us know if any of the information needs updating.

The Retirement Policy Statement will then go on to describe the various factors affecting your plan such as life expectancy, legacy, and the income you require for the rest of your life. It will give you your plan success rate, which is the percentage of simulated scenarios that left you with a closing value above your desired legacy amount.

In addition to this, you will be able to see your cashflow chart, and how your total assets change over the course of your retirement.

Scroll through the images below to see examples of these important outputs that you will receive in your Retirement Policy Statement.


Income Sustainability Review

Click here to see an example Income Sustainability Review Report.

Provided to you annually, this important document will detail your current situation and how that looks when simulated for the rest of your life. It will cover your risk profile, the financial objectives you have told us about, and your capacity for loss. Your capacity for loss will be given as the annual income you can afford to take in the worst investment returns scenario from the last 120 years of investing data. This is very useful as it shows you what income you can sustain if the worst happens and you have lower growth than you hope for.

The most vital aspect of the report is your Sustainable Rate of Spending. We decided to use this as the key output rather than a Sustainable Withdrawal Rate. The main reason for this is that a Sustainable Withdrawal Rate only considers your pension drawdown, and how much you can afford to take from your pension pots to ensure they don’t run out. We believe that is looking at your situation from a very narrow perspective. Nowadays, most clients have other sources of income, and other investments such as ISAs and General Investment Accounts. Therefore, the important figure is how much can you afford to SPEND.

Your Sustainable Rate of Spending will be given to you as an annual figure, for example £40,000 per year. This tells you that you can spend £40,000 per year every year and you still have more than an 85% chance of success with your plan.

Furthermore, we will review your current investments and recommend any changes we believe should be made. This could be changes to the amount you contribute or withdraw. It could also be a change of investment strategy. Our recommendations will be personal to you and would only be included if they increase your chance of reaching your life goals.

Find out more about our Income Sustainability Review here.


We know that retirement is not an easy time. Years of reliable income is coming to an end and suddenly you feel that your wealth is slipping away. With our Retirement Planning service we can put the power back in your hands and ensure you feel in control for the rest of your life.

Most importantly, retirement is about enjoying the later years of your life and ticking the final ideas off your bucket list. Money should not be a limiting factor in this, but a facilitator. We will make sure your plan allows all your dreams to come true.

Get in touch with us today to book your free initial consultation meeting so that we can demonstrate  how we can help you.

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