How Much Money Do I Need?

Will a million pounds see me through to retirement?


Ben Shelley

2 years ago | 4 min read

Is a million pounds enough?

Uploaded by Christopher on Unsplash

A question that we rarely ask ourselves, as we are focused on accumulating as much money as possible. Taking without ever asking, how much money do I need to live the life that I desire?

Think about it for a minute. Stop what you are doing and ask yourself, how much money do I need, to live the life that I want?

You can always earn millions a year, but if you have no desire to attend champagne-filled evenings and own a house in Beverly Hills, then do you need millions to live your life?

The Present

My current salary is £xx,xxx and my wife is at a similar level. Our combined income is £xx,xxx per year. A five-figure level of income that provides us with a modest lifestyle in London. We live in zone two, spending 40% of what we earn on rent and bills, an amount that increased each and every year. If we do not get a pay rise, then our quality of life reduces a little.

To continue living as we do, we would need to receive a pay rise each and every year, or at least every other year.

This will be the cost of remaining where we are and the cost of maintaining this lifestyle, but is it what we want?

Do we want to live like this forever? No.

We are 32 years old, coming off the back of two months of being married. We want to buy a house, start a family, as well as take the time to travel around the world. To complete all of this and tick everything off, we need money and more than likely, to move out of the current bubble.

Our present is unstable and we need to change.

Where to Begin?

Sitting down together one gloomy Wednesday evening (Date Night) my wife and I went through exactly what it is we were looking for.

From pets to property and holidays to nights out, we sat around to debate the issue.

Much like the politicians of today, there were raised voices and deals done under the table, but eventually, we reached a decision (unlike modern politics).

  • Starting next xxxx we will plan to xxxxxx
  • This will be the first step on the journey and once this step is complete we will move on to step two
  • This will involve xxxxxxxxxx x xxxx and xxxxxxxx x xxxxxx.

To achieve these steps we will need an initial amount of £15,000. This is not a small chunk of change and does not cover the ongoing costs.

Working Out the Final Amount

The initial amount covered, we needed to work out the lifetime total, estimating two children into the scenario. Being raised as only children we want to have two of our own, to ensure that neither gets lonely.

Child Poverty Action Group (CAPG) ran a report to find the average total of having children in 2019. They found that up to the age of 18, the cost of raising a child in a single-parent family costs a staggering £185,000 compared to £151,000 for couples.

For two children this brings the total amount of money to around £370,000. I would estimate that the actual cost will be closer to £300,000 as the second child will be able to inherit some of the clothes and books. Alongside this is the knowledge that my wife is from a family of six and so we will have a few hand-me-downs. So we start on £300k.

The May data shows:
…on average, house prices have increased 0.9% since April 2021
…there has been an annual price rise of 10.0% which makes the average property in the UK valued at £254,624

Adding the £250k to the £300k and we get £550,000.

More than half a million pounds and this is before we add into consideration holidays, food, transport and hobbies, as well as socialising. A staggering amount of money is needed for us to be able to achieve our hopes and dreams, as well as to be able to retire with a few pounds to our name.

A Huge Problem

As you can gather from the headline figures, we need a lot of money. If we take a million pounds as the key amount in which to save, then work back in terms of the years we have to practically earn that amount:

  • 33 years until we reach the age of 65
  • One million pounds required
  • No savings in the bank as of this entry being written
  • 30,303 per year (One million divided by 33)
    Divide by two and this creates a figure of £15,150 per person per year
    Or £2,525 per month (£1,262.50 each).

Breaking down the figure makes it a lot more palatable. It is easier to digest being as it is not too much beyond our current means. This would be especially true if we moved out of London and our cost of living reduced.

All of these sums do not take into consideration general health. As much as we are able to work a full-time schedule at this point in time, our health could deteriorate, meaning we are not being able to work and earn a full-time salary. This is something that would be hard to prepare for but the message is clear.

You can see why people seek to earn as much as they can. It is because no one knows what tomorrow will look like. The question should therefore be, what amount of responsibility am I happy to accept in life to achieve what I want?

A Final Thought

I need money to achieve the things that I have set out to achieve. I wish that it was not that way and that I could simply move through life doing exactly what I wish to but that is not how the world operates.

We all need to consider what it is we need to do in order to get through life in one piece. Whether that is working a six-figure salary at a high powered law firm and giving up any semblance of social life for years, so that you can retire early, or is it working in what is perceived to be a ‘menial role’.

Whatever we decide to do with our lives is personal and how much money we need to live that life is also. There is no real amount that you can take, only estimates, as ill-health can appear at any moment. We need to hope for the best and work for the worst, knowing where our lines in the sand are.


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Ben Shelley

#husband #marketer #writer #runner #reader #travel







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