A retirement projection answers a conditional question: what might happen if these inputs and assumptions held? It does not predict markets or tell you that a particular retirement date is safe. Its greatest value is showing which assumptions your plan depends on.
Start with income before or after tax
Personal Fortune’s retirement planner uses amounts before tax. If your household needs a particular amount to spend, the gross withdrawal may need to be higher. Do not enter a take-home budget and assume the result includes a tax calculation.
Separate today’s money from future pounds
The income target is entered in today’s money. Inflation increases the future amount needed to preserve that purchasing power. At 2% annual inflation, a £30,000 target today becomes about £36,570 after ten years. This is an illustration, not an inflation forecast.
Add income when it actually starts
Retiring at 60 does not mean every pension starts at 60. Enter the timing of State Pension and other income separately. A pension starting later can reduce withdrawals later, while leaving a larger gap in the first years. Check your own State Pension forecast rather than assuming everyone receives the same amount.
For rental income, use a figure that accounts for the relevant expenses and consider void periods and repairs. A steady annual figure is a simplification. A temporary income should also have an end age.
Growth and withdrawal rates mean different things
A growth assumption describes investment returns. A withdrawal rate describes the amount taken from the portfolio relative to its value. Entering 4% growth does not mean a 4% withdrawal is guaranteed to last. The values happen to look similar but serve different purposes.
Keep fees consistent
The simplified planner asks for growth after fees. If you use a return that already allows for charges, do not deduct those charges a second time. If you start from a before-fee estimate, account for investment and pension costs before entering a net assumption.
Read the yearly table
Follow contributions until retirement, then compare the income target with State Pension and other income. The gap determines the pension withdrawal. A shortfall means the modelled pot could not cover the required withdrawal in that period. A positive final balance only means the money lasted to the chosen end age under these assumptions.
Test a less favourable version
- Reduce growth and increase inflation.
- Try a later retirement date or lower income target.
- Check a longer retirement horizon.
- Temporarily remove uncertain other income.
- Consider costs missing from an ordinary monthly budget.
The model uses constant returns. Real losses early in retirement can be especially damaging while withdrawals continue. It does not calculate that uncertainty or the probability of success. MoneyHelper explains investing during retirement.
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