Chapter 10

Financial plans and the risks we take

Any financial planner worth his or her salt will tell you that the amount of money that you have to spend in retirement will depend mainly on the amount of money you start with, how much you contribute to your savings, the rate of return on your assets, and the taxes you pay.

But let’s get concrete. As an example, suppose we wanted to find out how much we have to put aside each year to live comfortably in retirement. I will cover the opportunities and issues with pension plans and insurance-related savings products like annuities later, but for now assume you are saving up and have the luxury of ignoring tax.

Building your savings

Suppose you are 30 years old and have savings of £10,000 after ...

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