money needed for future

angel1967_2

hi there,
can anyone help me, i am trying to work out how much of an nest egg i would need for the future, if i retire at 55years old.(i am 39 now)
i would like 12,000 per year to live on (todays money)
this is driving me mad, i just can not work this out. i appreciate any help, thank you

dmg24

£12,000 now, will be worth a great deal less in sixteen years. If you want it as todays value, then all you need to do is multiply 12000 by the number of years you expect to live. However, this calculation is really pretty meaningless.

You really need to seek advice from an IFA.

goshdarnit

If you got 5% interest, £240,000 would be needed. However, you'd be paying tax on that, so would need £300,000. You would also need to increase the £300,000 by at least 4% per year to take into account inflation (although inflation is obviously more than 4% per year if you take into account normal things like council tax etc etc). So you would end up with £0 per year of the £12000 as all the interest would be used to take into account inflation.

However, if you intend to die quite soon (nor recommended) you could get the £12,000, which in real terms would reduce by about £480 in the first year, £460 in the second etc etc and spend some of the initial £300,000 to off-set this inflationary cost.

However, £300,000 in 15 years may be enough for you to purchase a toothbrush, depending on tons of other stuff.