Retirement7 min read·8 June 2026

10 Reasons Your Retirement Number Is Probably Wrong

Most retirement numbers come from a rule of thumb that was never built for you. Here are ten reasons the figure in your head is likely off, and what actually moves the answer.

Scenarios

10 Reasons Your Retirement Number Is Probably Wrong

This article is for general information and educational purposes only. It does not constitute financial advice. You should consult a qualified financial adviser before making any financial decisions.

The Number In Your Head

Most people have a retirement number in their head. £500,000. A million. Two million. It came from a magazine article, a workplace pension calculator, a friend, or a rule of thumb that was easy to remember.

The number sticks, and the planning gets built around it. The trouble is that the number is almost always wrong. Sometimes you need a lot less than you think. Sometimes a lot more. Either way, building a plan on a figure you haven't pressure-tested is the most common mistake in retirement planning.

Here are ten reasons your retirement number is probably wrong, in roughly the order they show up.

1. You Used a Rule of Thumb That Wasn't Built for You

"25 times your annual spending." "10 times your final salary." "Two-thirds of pre-retirement income." These are the headline rules, and they all share the same flaw: they describe an average person who doesn't exist.

The 25x rule comes from US data on a 30-year retirement starting in the early 1990s. It assumes one inflation regime, one tax code, no State Pension, and a particular asset mix. None of those map cleanly to a UK saver in 2026.

If your number came from a rule of thumb, it's a useful gut-check. It isn't an answer.

2. You Assumed Spending Is Flat

The standard projection picks a number, say £35,000 a year, and rolls it forward for thirty years with an inflation adjustment. Real retirees don't spend that way.

Research consistently finds a "smile curve": higher spending in the active early years, a noticeable dip through the middle, and a rise at the end driven by health and care costs. Treating retirement as a uniform liability overstates the middle decade and understates the last one.

The shape of your spending matters as much as the level.

3. You Used Average Life Expectancy

A 65-year-old in the UK has an average life expectancy of roughly 86 for men and 88 for women. Planning to those ages leaves a coin-flip chance of outliving the plan.

One in four 65-year-olds will live past 92. One in ten past 96. If you have longevity in the family or you're already in good health, planning to 95 is prudent. Planning to 100 isn't paranoid.

Using the average instead of the upper end of the distribution is one of the single largest sources of error in the final number.

4. You Forgot Tax

A £750,000 pension pot is not £750,000 of spendable income. Withdrawals above the 25% tax-free portion are taxed at your marginal rate. Add the State Pension on top and meaningful drawdowns push into the higher-rate band quickly.

A retiree spending £30,000 a year may need to pull £36,000 to £40,000 gross from a pension to land there. Over a thirty-year retirement, the gross-to-net gap compounds into six figures.

If the number in your head is gross, the after-tax reality is smaller. If it's after-tax, the pot needs to be bigger.

5. You Assumed Your State Pension Is Full

The full new State Pension in 2026/27 is £11,973 a year. Most planning quietly assumes you'll get it. Plenty of people won't.

You need 35 qualifying National Insurance years for the full amount. Anyone with extended time abroad, long career breaks, self-employment gaps, or contracted-out years from older workplace pensions may be short. The gap between 35 and 28 qualifying years is roughly £2,400 a year for life.

The forecast at gov.uk is the authoritative source.

6. You Used One Inflation Rate

A 2% inflation assumption looks tame on paper. Real inflation runs in regimes. The UK saw 11% in 2022 and sub-1% for stretches before that. Pension increases, energy costs, and care fees each move on their own clock.

The damage compounds quietly. £35,000 of spending today is £63,000 in twenty years at 3% inflation, and £78,000 at 4%. A plan that assumes "2% forever" looks fine until it doesn't.

The useful question isn't "what's the average?" but "what happens to the plan in the bad inflation paths?"

7. You Ignored the Bridge Years

The State Pension currently starts at 66, rising to 67 from 2028 and to 68 thereafter. Retire at 60 and that's six to eight years of self-funded income before the State Pension lands.

The bridge years are expensive because they front-load withdrawals into the most fragile part of a portfolio's life: early, with no income offset, and exposed to sequence-of-returns risk. Plans that average across the whole retirement miss this entirely.

The cost of retiring at 58 rather than 65 is rarely just the seven extra years of spending. It's the seven extra years of unsupported drawdown.

8. You Assumed One Average Investment Return

"I'll get 5% a year" is the most common assumption in DIY retirement planning, and one of the most misleading. Markets don't deliver the average. They deliver something different every year, and the order matters.

A retiree who hits a 30% drawdown in year one may run out of money even with strong average returns over the following twenty-five years. The same drawdown in year twenty barely registers. The arithmetic is identical. The sequence is not.

Single-number projections hide this completely. They show you the average future, which is not the future you live through.

9. You Overestimated Your Spending

Most people anchor their retirement number to their current salary. The honest version starts from actual spending, not income.

The two often differ by 20% to 40%. Income is what arrives. Spending is what leaves. The gap is pension contributions, savings, mortgage capital, National Insurance, and the chunk of income tax that falls away when income drops.

A month of tracked spending usually surfaces the gap. If the figure is meaningfully lower than your salary, the retirement number is lower than the salary-anchored estimate, and often by a lot.

10. You Used a Single Number Instead of a Range

The biggest reason every number on this list ends up wrong is that any single number, by definition, ignores uncertainty.

Real planning produces a range. Something like: "with this pot, this spending, and this allocation, the plan succeeds in 87% of simulated futures and fails in 13%, with the failures clustered in early sequence shocks combined with high inflation."

That sentence is harder to remember than "you need a million." It is also closer to true. A single number creates false confidence in both directions: people who are fine feel scared, and people who aren't feel safe.

What This Adds Up To

The inputs that move a retirement number most are spending (actual, not salary-anchored), guaranteed income (including any State Pension shortfall), the planning horizon, the tax treatment of each pot, the inflation path, and the shape of returns rather than the average.

When all of those are made explicit and modelled together, the output isn't a tidier single number. It's a range of outcomes with a probability attached, and a clearer view of which inputs the plan is most sensitive to.

If you want to see your own range, you can model it for free.

A Few Things To Be Clear About

This isn't financial advice. Scenarios isn't FCA-authorised and isn't a regulated adviser. Retirement planning involves trade-offs that depend on your tax position, family circumstances, health, and goals. A regulated adviser is paid to help with those decisions.

The point of an article like this isn't to tell you what your number is. It's to make the assumptions explicit, so that when you do arrive at a figure, the inputs behind it are ones you've chosen rather than ones you've inherited.