What is a Retirement Forecast

Retirement Forecast: A Glimpse into Your Financial Future

A retirement forecast is like a crystal ball for your financial well-being during your golden years. It provides valuable insights into what your retirement income might look like based on various factors and assumptions.

What Is It?

Our retirement forecast system is essentially a very clever calculator that  takes all of the information that you provide us, along with a set of assumptions, to estimate what the future value of your pensions/investments might be in the future. It then uses these values to determine what level of income might be achievable from them to determine whether your current retirement goals are realistic.

As mentioned above the retirement forecast is just a calculator (although a very complex one) and relies on a set of assumptions. It is a fantastic starting point and a great way to start thinking about what you want your retirement to look like, however it should never be solely relied upon for your retirement planning. The retirement forecast reports should never be seen as financial advice and therefore you should always seek suitable financial advice before making any decisions on your retirement plans.

What Does It Show?

There are three main elements that your report will highlight:

1. Pension Income Projection: A retirement forecast estimates the likely pension income you could receive when you retire. It can take into account; both defined benefit (such as final salary) and defined contribution pensions (like private pensions, or workplace pensions), as well as your entitlement to State Pension.

2. Shortfall Analysis: If the forecast determines that your current plans are not on track to meet your goals then it will show a shortfall. Where this is the case it will calculate various ways to make up this shortfall. This would normally include; increasing your savings, aiming for higher investment growth or delaying your retirement age.

3. Data and Assumptions: The report will also show the data inputted into the system to provide the report. This will be derived from the information provided to use via our form. It will also show the underlying assumptions used for the calculator. 

What Information Do I Need?

Our form will ask you for various information about your current circumstances and about your retirement goals and objectives. The more accurate information you can provide the more accurate the results will be.

The first part of the form concentrates on your retirement goals i.e. what age you want to retire and how much income you want in retirement. You might already have an idea of what income you need in retirement, but if not see our "How Much Do I Need" page for some guidance. 

The second part of the form asks about your current pension plans. We have kept the information here very basic such as; the latest value of the plan, how much you pay into the plan and who the plan is with. 

Finally we ask for some basic details about you. Name, Date of Birth, Gender etc. 

How Does It Work?

Retirement calculations are based on mathematical projections. There are various assumptions used, such as the continuation of your current pension contributions, expected investment returns, future inflation and interest rates, state pension, method of retirement benefits etc. For more details of the assumptions used see our Assumptions Used page.

Remember that all retirement forecasts are hypothetical. They rely on the assumptions and information you provide. So, the accuracy of your estimate depends on the quality of information and assumptions.

Why Is It Important?

A retirement forecast allows you to plan ahead. It helps you understand whether your current savings and pension contributions are on track to meet your retirement goals.

If your forecast suggests that your pension income might fall short of your desired lifestyle, you can take corrective actions. These might include increasing contributions, adjusting your retirement age, or exploring other investment options. Often the earlier you find out that you are not on track the easier it is to correct.