Lesson 1
Calculating Your Target
Estimate your future needs using realistic assumptions about your retirement lifestyle and anticipated annual expenses.
Use the 4% rule
To estimate how much you need, multiply your desired annual retirement income by 25. This gives you a starting total for your pension pot.
Factor in inflation
Costs will be higher in 30 years than today. Assume a 2-3% annual inflation rate when calculating future needs.
Build your model
Use a basic spreadsheet. List your current assets and your age. Input your expected monthly contribution and a conservative annual growth rate of 5-6%. Play with the numbers to see how increasing your contribution by even 1% significantly shifts the final result. This concrete calculation turns a vague goal into an actionable project. It highlights why starting today is more effective than saving double the amount ten years later.