You wouldn’t be alone if you thought this was simply a case of working out how much you have and guessing how long it needs to last you, dividing one from the other and effectively allowing yourself an annual income.

That seems pretty reasonable, right? After all you know what’s in your pension pot, how much is in your ISA and what’s in your bank account. At some point you’ll receive the state pension and that will top you up a bit, plus you’ve considered what age you might live until, based on your own health and your family history.

So you might be 55 and think you’ll live to 80. You have around £250,000 in assets and will therefore have £10,000 a year to live on. Sounds okay and we can understand why this is a start point for most.

But we think there is a better way.

We believe this method gives you a limited life and lifestyle and doesn’t take into account so many factors that are important and need some serious consideration.

What about inflation? The cost of pretty much everything rises year on year so you’ll need to factor in that your outgoings will go up, to maintain the same level of lifestyle.

Will you want to live the same life for the next 25 years?

Our experience tells us your retirement will progress through different stages depending on when you are most active and want to enjoy more hobbies, pursuits and holidays, to when you might slow down a little and spend a little less. Then there is the cost of support to continuing living independently in your home, ultimately through to the potential need for a care home. The first assumption is that people will pay for their own care, so this can become very costly in your later years.

Then there are the big one offs. What have you been working your whole life for if not to buy that dream car, take a once in a lifetime trip, help out your children or finally get that new kitchen fitted?

Giving yourself a fixed annual sum just doesn’t allow for this level of flexibility and probably means you will deny yourself so many of the things you want and want to do in retirement.

So you can start to see why we take a completely different approach to calculating what enough looks like. It very much depends on you and we feel passionately that we can guide you through these considerations so when you ask ‘Do I have enough?’ we’ll tell you confidently what your assets can be used for. We’ll provide you with a plan showing diagrams and models that prove you do indeed have enough, when you could retire and what would be left in your pot at the end in case you want to leave anything to loved ones.

It’s called Lifestyle Financial Planning and we’re pretty damn good at it. We are rated 4.9 out of 5 on VouchedFor by our existing clients.