“How much money do I need to retire?” This is perhaps the number one question in personal finance.
People want to know how much money a retiree actually spends to see how far away they are from their own retirement goals.
A recent article I came across from which money magazine aims to answer this exact question.
The article is pretty comprehensive in nature as the good people at which have gone about surveying 6,000 real retirees to find out their actual spending habits. They survey was done in April 2019.
How Much Does The Average Retiree Spend In Retirement?
According to the article, retirees spent an average of £2,200 a month per household. This equates to about £27,000 a year.
This £27,000 a year is for a retirement which includes the essentials and some luxuries such as hobbies, eating out and holidays abroad in Europe.
Whilst £27,000 a year is the average retiree household spend, different people spent different amounts in retirement spending on their lifestyles.
Those that want an essential lifestyle where the basics of groceries, housing payments, insurance, transport, utilities, household goods, health and new clothes are covered spent an average of £1,051 a month or £12,8589 a year.
Whilst those that wanted a more luxurious lifestyle spent which included long haul trips and a new car every 5 years spent £42,000 a year.
The Which article is an interesting read and I is deffo worth a read. So be sure to check it out.
Whilst the Which article is great, it is by no means the only study on retirement.
There was a study done by the Centre for Research in Social Policy, Loughborough University which is also really helpful for soon to be retirees.
The data showed that single retirees who want a minimum standard of living need an annual income of about £10,200.
And for those that want to have a more comfortable retirement with more flexibility, they need an annual income of £33,000.
So have a read at both articles as they are both beneficial in their own ways. Doing so will allow you to get a picture of how much the average retiree spends in retirement and how much money you will need for your own retirement.