Many of my clients have recently approached me to determine if they have enough capital to retire with.
I think the reason for this is the fantastic growth we have witnessed from investments and properties over the past decade, which has brought retirement goals within reach.
Unfortunately the low interest rate environment, which was the catalyst for growth, results in very low income levels. As capital values have grown income yields have fallen, resulting in investors needing more capital to produce the same income.
The two key factors in determining whether you have enough retirement capital are, firstly, how much income do I need, and, secondly, how long will I need the income. I suggest you draw up a budget to calculate how much you will need in retirement. Make adjustments for changes in lifestyle, for example, your fuel bill may come down while your medical expenses may go up. You can use the assurance mortality tables to try to plan how long you are likely to live. But with the miracles of modern medicine you’ll probably be wrong!