How long will your money last in retirement?

You've worked hard for years, waiting for the days when you can finally put your feet up and reap the rewards.

Whether you’re in receipt of a company pension, social security or your own personal savings, how long your money will last depends entirely on how much you’ll have.

The basic state pension is £115 per week, although this is changing soon. An increasing number of people put funds away into a private pension plan, the average amount coming to anywhere between £60,000 and £125,000.

To make this combination of private and state pension amount last for roughly two decades, retirees can afford to spend around £10,000 per year.

For many people, retirement is the first time in their financial life that they are living with no concrete income and no definite idea of how long their money will last.

This may be the case for you and you may have to be more mindful of your spending than you have been in previous years. You won’t have to go through a complete lifestyle upheaval in order to not outlive your means.

Simply get an idea of your current incomings and outgoings, with the help of bank statements, receipts and payslips. See if there are any expenses that you can afford to trim in order to save money, remember to make allowances for events such as birthdays and Christmas and you'll soon come up with a realistic budget.

Many people find it useful to live on their planned budget for a few months before retiring, to see how they get along and if any changes need to be made.

The average annual salary currently stands at £21,326.

To match this, your pension pot would have to have upwards of £425,000 in order to last 20 years. But don’t panic, your money stretches a lot further during your retirement years.

Since you’re no longer working, you won’t be spending any money on commuting. The average worker spends 17% of their annual salary on travelling back and forth to work.

Not only can you say goodbye to the rush hour crowds and snail’s pace traffic, but you’ll be saving possibly thousands every year on commuting costs, and from the age of 60 you are eligible for a free bus pass.

In addition to this, you might be lucky enough to have paid off your mortgage and the kids will probably be all grown up and moved out. These are just a few of the ways that you’ll save money during retirement; the rest is up to you.

It’s essential to enjoy yourself, but equally important to stick to the budget you have set yourself. Do this, and your money will last for the entirety of your retirement years.

If you need expert advice or help and support with your pension and retirement planning from a trustworthy source, contact Unbiased today.