It is likely your income requirements will fall from where they are now, because, ideally, you will have paid off your mortgage; you won’t have the costs of working; your children will have grown up; and your lifestyle is likely to be scaled down somewhat.
It’s worth getting hold of a state pension forecast, because under the new flat rate state pension, you may receive something very different to the flat rate you’re expecting.You then need to factor in income from other sources, such as wages from any work you do in retirement, interest from savings, and rent from buy-to-let income.
Relying on an expected inheritance to fund your pension is less than satisfactory, because it means you will be hanging on for the death of a loved one in order to be able to retire. If downsizing your property is part of the plan, then think carefully about this too. Do your research, and err on the size of caution when working out how much cash this will free up.
But it’s not all doom and gloom! You can, for example postpone your planned retirement date to, say, five years later. You might also think about the lifestyle you were planning in retirement, and whether there are more cost-effective approaches. There are also ways to increase the amount you have in your pension pot. Perhaps you can re-evaluate the figure you can afford to put aside for your pension each month.
Finally, don’t assume that just because you can’t afford to put enough away right now that you are bound to fall short in the long term. You should look carefully at the maximum you can afford to save at the moment, then make a date to revisit your arrangements regularly in the future and make some positive changes then. Who knows what may have changed over time, and how much more you save.
There’s a lot to think about. We need to talk!