How much can I spend in retirement? Anne’s pension predicament

If you’ve read any of my previous blogs, you’ll probably have guessed that I enjoy running.  Sometimes, I run with music, other times without.  But I also listen to podcasts on some of my runs to keep me up-to-date with personal finance and financial planning news.  Recently, I listened to an episode of BBC Money Box Live in which Anne from Dorset asked the question “How much can I spend in retirement?”.

Title "How much can I spend in retirement? Anne's pension predicament

This is a question that might sound familiar to many pensioners or people approaching retirement.  While I’m not going to suggest what I might advise Anne to do, I am going to talk about some of the her points.

If you are wondering what guidance Anne was given, you should listen to the BBC’s podcast

Money For Nothing

In the podcast Anne imagines that others might think that she gets “Twenty thousand pounds a year for … doing nothing”.  But really, Anne receives her healthy pension income because she’s worked hard and saved throughout her life.

Our feelings towards money are complicated.  They can be affected by the financial situation our families were in when we were growing up.  Sometimes, our feelings about money, based on past experiences, can make it hard for us to make the right decisions in the present.

Speaking to a financial planner could help.  Talking things over with a professional could help someone like Anne to feel more content with the pension she receives and more confident about her financial future.

How much can I spend in retirement?  A financial plan could have the answer

Anne’s main worry seems to be that she is unsure how much of her money she can spend.  While it is clear that she would like to travel more, she’s not really sure if she can afford it.  This is probably an ambition that many of us share.  I certainly enjoy getting away and seeing new places.  So how can Anne work out how much she can spend in retirement?

Cash flow modelling is a way of working out whether you have enough money to live the life you want to live.  Using details about your income, spending, and future goals a financial planner can build you a plan for your retirement.  Hopefully, a financial plan would give Anne the confidence to spend her money.  She would be able to focus living her life rather than worrying about running out of money.