10 Retirement Numbers Everyone Needs to Know

Most people spend more time planning their next holiday than planning their retirement.

And that is understandable. A holiday is easy to picture, but retirement is not. Retirement is full of uncertainty. 

You do not know exactly how long you will live, how much you will spend, what inflation will do, what governments will change, or what life will actually feel like when work stops.

So in this post, we want to walk you through 10 retirement numbers that matter far more than most people realise.

The goal is to help you stop drifting into one of the most expensive and emotionally important phases of your life without a real plan.

For each of the 10 numbers, we’ll share ‘what it means’, ‘why it matters’ and ‘what you should be doing now’.

If you are new to our work, we are a husband and wife team.

Ken: I’m a Chartered Accountant, Former CFO and Financial Coach. 

Mary:  I’m an Entrepreneur and former e-business analyst.

Together, we achieved Financial Independence at the age of 34, including being mortgage-free in 7 years.

We’re also Sunday Times Bestselling Authors of our debut book, Financial Joy, a 10-week Plan to help you Banish Debt, Grow Your Money and Unlock Financial Freedom. 

And more recently, our new book, The Wealth Habit, also a Sunday Times Bestseller, and it teaches you the mindsets, habits and systems you need to build wealth so you can live the life you want to live in a more guaranteed and sustainable way by making small changes today.

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10 Retirement Numbers Everyone Needs to Know

Let’s jump straight in and start with the first number.

1. The first retirement number is 8%

What it means

This is the minimum auto-enrolment pension contribution level in the UK for many workplace defined contribution pensions. 

It is usually split 5 per cent from the worker and 3 per cent from the employer.

If you're reading from outside the UK, you'll have a comparable number for your location.

Why it matters

This is where many people get lulled into a false sense of security. 

They see money going into a pension and assume they must be on track.

But default does not mean enough.

Default usually means minimum.

This contribution level is not likely to be enough on its own to fund a comfortable retirement for most people. 

If you’re 35, on £40,000 a year, and only paying the minimum into your pension, you may be heading towards something closer to £7,000 to £8,000 a year in today’s money by 65, which is not a comfortable retirement.

In case you are wondering what the UK median pension pot is by age, the ONS have published this, and we’ve summarised it in a chart below for you.

This is what a typical person has in their pension pot at different ages.

Is your total pension pot above or below the numbers for your age group? Comment below and tell us.

You can see on there that for people aged 65 to 74 (retirement age), the typical pension pot size is around £145,900! That is not a lot of money.

In case you are wondering, what does a typical person saving for retirement have in total for their Pensions + ISAs + Cash savings?

We managed to pull some numbers together, again from ONS and ISA numbers from Finder. Here it is below

Again notice that for that the highest total pot of Pension + ISA + Cash savings is around £209,265 for the typical person.

It might sound like a lot, but it isn’t.

What Should You Do?

Treat default settings as a starting point, not a plan.

Check what percentage of your income and employer contributions is actually going into long-term retirement investing. 

A lot of people don’t know these numbers.

Then ask yourself honestly whether you are just doing the minimum.

📌 If you’d like 121 financial coaching to plan your retirement, we recommend booking a 121 Power Hour session with us where we’ll take time to understand your situation and work with you to create a plan.

Many people have booked before and received amazing transformations.

Here are some website testimonials you can read. Feel free to pause and read them.

2. The second retirement number is 17%

What it means

This is a much more realistic total contribution level if you want a stronger retirement outcome. 

In the previous example of a 35-year-old earning £40k a year, around 17 per cent of qualifying earnings is needed to support a private pension closer to two-thirds of their final salary once the State Pension begins.

Why it matters

This number shows the gap between what is legally required and what may actually be needed.

If 8 per cent is the minimum, 17 per cent starts sounding more like an intentional retirement strategy.

What Should You Do?

Aim to increase your contribution rate gradually, especially when your income rises.

Use payrises and bonuses wisely.

If you are in the UK, think about how your workplace pension, SIPP, and Stocks and Shares ISA can work together.

If you are in the US, think in terms of your 401(k), IRA or Roth IRA, and brokerage account.

A rule of thumb worth considering is to ensure that your total gross contribution rate (ie employer and employee) to my private pension funds is around half of your age 

e.g. 30 years old, you want ideally a gross contribution (Employer + Employee) of 15%.

Or 40 years old, you want a gross contribution of 20%. 

3. The third retirement number is 85

What it means

This is the average longevity for a 65-year-old in England and Wales. 

Women are forecast to live slightly longer, men slightly less. A woman who is already 81 has an even chance of reaching 90.

Below is the ONS data on life expectancy at birth for UK females and males between 1980 to 1982 and 2022 to 2024, and how that has increased over time.

Why it matters

People regularly underestimate how long retirement may last.

And if you underestimate time, you will usually underestimate:

• how much money you need
• how long your investments need to last
• how damaging inflation or the cost of living can be
• and how important a drawdown strategy becomes

What Should You Do?

Plan for a retirement that lasts longer than average, not shorter.

Do not build your retirement around the hope that you die conveniently on time.

That said, although life expectancy is rising, we are seeing more and more people pass away before the age of 85, which further adds uncertainty to the idea of planning for retirement in old age.

4. The fourth retirement number is 15

What it means

The first 10 to 15 years of retirement are often the most active and, for many people, the most expensive.

Why it matters

A lot of retirement planning assumes that spending drops as soon as work stops and this is what the research shows.

However, in reality, many people do the opposite in the early years of retirement:

• They travel more (I’ve seen this with our newly retired neighbours and also my parents, for example)
• They socialise more.
• They say yes to invitations more often.
• They finally have time for hobbies, coffee dates, gym sessions, classes and experiences they delayed while working.

All this comes at a cost, and retirement has phases.

What Should You Do?

Plan for at least two retirement phases:

• the active years
• the slower years

Do not assume your spending drops immediately just because your working years end.

5. The fifth retirement number is 50%

What it means

This is a target replacement rate (TRR).

In simple terms, it is the share of your working income you may need in retirement to maintain a similar lifestyle. 

For a comfortable retirement, a useful estimate is around 50 per cent.

So let’s say you were earning 80k in before retirement, you’d want annual retirement income of at least 40k.

Why it matters

This is a better way to think than obsessing only over pension pot size.

The better question is not just: “How much money do I need?”

It is: “What percentage of my current lifestyle do I want to replace?”

Some costs disappear in retirement, like commuting and National Insurance in the UK. 

But others remain (e.g. travelling abroad on holidays), and some may rise (e.g. cost of healthcare or even other costs like care homes and so on).

What Should You Do?

Work out your current spending and ask:

• what disappears when work stops?
• what stays?
• what increases?
• what kind of lifestyle do I actually want?

That will give you a more useful retirement target.

But remember to bear in mind that a lot of these considerations will depend on where in the world you choose to retire.

Location matters a lot.

6. The sixth retirement number is 30%

What it means

For a single, well-off retiree in the UK, the State Pension can still make up around 30 per cent of total retirement income. 

The full UK State Pension is currently around £12,548 a year. That’s £25,096 for a couple!

Why it matters

The State Pension matters more than many people think. 

Especially for those who are getting it now or likely to get it.

But it is also not enough to carry most people’s retirement plans on its own.

It is useful support, not a complete solution.

That said, although my parents don’t get the full state pension, I see how much it matters to them, and I wish our generation would also get it, but it is highly unlikely.

What Should You Do?

Factor the State Pension into your plan (as a bonus), but do not build everything around it.

Check your state pension forecast.

Here is what it looks like on the government website:

We did both ours before writing this post.

Below is an example with mine and it says I am on schedule to get the full state pension by the year 2051 if I contribute NI for another 8 years.

Note that 2051 is a whopping 25 years from now! The world will be such a different place by then!

 

I feel in a way like this is a carrot that’s being dangled in our faces and one we may never receive.

If you pay close attention to that screenshot, it does say “Your forecast is not guaranteed and is based on current law”. This is a reminder that things can and will change over time, especially as the state pension is technically a ‘Benefit'.

And don’t forget that where you receive your state pension matters. 

Some locations get annual increases in the state pension (e.g. countries in Europe) and some don’t (e.g most countries in Africa, Asia and so on).

We’ll link below and above to a video we made about this for you to watch.

And if you are outside the UK, apply the same logic to the government support in your own country:

• State Pension in the UK
• Social Security in the US
• or the equivalent where you live

Is it helpful to get? yes. Is it enough on its own? Often, no.

7. The seventh retirement number is 67

What it means

This is the UK State Pension age after March 2028. 

It is due to rise from there, and the move to 68 may come sooner than currently expected.

Why it matters

Governments are not making retirement younger, easier or more generous.

People are living longer. Public finances are under pressure and official retirement ages are moving later, not earlier.

The Triple Lock will eventually stop, and they’ll keep extending the retirement age.

What Should You Do?

Do not build your whole retirement plan around the age the government says you can claim state support.

Build your own assets so you have more flexibility than the official timetable gives you.

📌 If you’d like 121 financial coaching to plan your retirement, we recommend booking a 121 Power Hour session with us where we’ll take time to understand your situation and work with you to create a plan.

8. The eighth retirement number is 4%

What it means

This is the classic rule of thumb for pension drawdown. 

A common approach is to withdraw 4 per cent of your portfolio in the first year of retirement, then increase that amount by inflation each year after that. 

A median withdrawal rate for larger UK defined contribution pots sits around 3.5 to 3.8 per cent.

Why it matters

This helps people think about what a sustainable retirement income might look like.

The real risk is not just how much you withdraw, it is what happens if markets fall early while you are taking money out. 

That can do serious damage to a retirement portfolio.

What Should You Do?

Use 4 per cent as a guide (especially if you’re US-based), not as a guarantee. If you’re in the UK, aim for 3.5% to 3.8%.

Think about:

• how flexible your spending is
• how volatile your investments are
• whether you can reduce withdrawals in bad years
• and whether your plan can survive a difficult first decade

We cover all of this in a lot of detail in Week 9 of our book, Financial Joy. Please go and read it there for more info.

9. The ninth retirement number is 2.8%

What it means

This is the inflation rate. 

Why it matters

Inflation quietly erodes everything.

A lot of people look at an investment return and think, “I made 7 per cent.”

But if inflation is 2.8 per cent and your investment fees are 1 per cent, your real progress is much lower at around 3.2% 

i.e. 7% – 2.8% – 1%.

Retirement planning is not just about getting positive returns. It is about preserving and growing purchasing power.

What Should You Do?

Always assess investment returns after:

• inflation
• fees
• and, where relevant, tax

And keep your portfolio simple enough that you actually understand what it is doing.

10. The tenth retirement number is 4 in 10

What it means

Around 4 in 10 marriages end in divorce by the 25th wedding anniversary. 

This is a very sad statistic!

Pension wealth can also be very uneven within couples. 

At age 43, median pension wealth for women is much lower than for men, and after divorce the gap can widen sharply.

Why it matters

Retirement planning is not just an investing issue. It is a relationship issue.

Too many couples still operate with one person handling the weekly spending and the other quietly “handling the long-term money”.

That creates risk, especially for the partner with less visibility and less pension wealth.

You might think your partner is helping you invest, but they might not be doing what you expect.

What Should You Do?

If you are in a relationship, retirement planning needs to be shared.

Both of you should know:

• what you have
• where it is
• how much is going in
• what the long-term plan is
• and what happens if life changes

Conclusion

So those are the 10 retirement numbers we think matter most, not because they answer everything, but because they force better questions.

• 8 percent asks whether you are mistaking the minimum for enough.
• 17 percent asks whether your plan is actually serious.
• Age 85 asks whether you are planning for enough time.
• 15 years asks whether you understand the expensive years of retirement.
• 50 percent asks what lifestyle you are trying to replace. 
• 30 percent puts state support in its proper place.
• Age 67 reminds you that official retirement ages are moving later.
• 4 percent asks whether your drawdown plan is realistic.
• 2.8 percent reminds you that inflation is always there.
• And 4 in 10 reminds you that retirement planning is also a relationship conversation.

The biggest lesson in all of this is this: Retirement planning should not start with panic or guesswork. It should start with clarity.

Clarity about the life you want and where you want to live that life.

Clarity about what that life costs, given the location and quality of life that you want.

And clarity about whether your current habits are actually taking you there.

Which of these 10 numbers stood out the most to you and why? Comment below and let us know.

Don’t go anywhere; check out these related posts to help with your retirement planning:

• Book a 121 Power Hour session with us for your retirement or Financial Freedom goals.
• I'm 51. Is It Too Late to Have a Comfortable Retirement?
• 10 Hidden Games The System Uses to Keep You Poor

Here is the video version on this post on 10 retirement numbers everyone needs to know:

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And as always, in all things, be thankful and seek joy.