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Planning for retirement is one of the most important financial decisions you will make in your lifetime.
Yet, many people delay starting their retirement planning, often underestimating how much they will need or assuming they have plenty of time.
The reality is that the earlier you start, the more financially secure and comfortable your retirement is likely to be.
The Ideal Time to Start Planning
The simple answer to when you should start planning for retirement is: as early as possible. However, retirement planning can look different depending on what stage of life you are in.
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In Your 20s and 30s (Gen Z & Millennials): Laying the Foundations
Starting your retirement savings in your 20s or 30s provides a significant advantage, thanks to the power of compound interest. Even small contributions to a pension or investment plan at this stage can grow substantially over time. Key actions to take include:
- Enrolling in your workplace pension scheme and maximising employer contributions.
- Setting up a private pension, such as a Self-Invested Personal Pension (SIPP), for additional savings.
- Investing in tax-efficient options like ISAs (Individual Savings Accounts) to supplement your retirement income.
In Your 40s (Generation X): Increasing Contributions
If you haven’t started saving yet, your 40s are a crucial time to make retirement planning a priority. At this stage, you might be more financially stable and able to contribute more. Consider:
- Increasing your pension contributions to take advantage of tax relief.
- Reviewing your investments to ensure they align with your long-term goals.
- Paying off debts to reduce financial burdens in retirement.
In Your 50s and 60s (Boomers): Fine-Tuning Your Plans
As you approach retirement, it is essential to review your financial position and make necessary adjustments. This includes:
- Estimating how much income you will need and checking your pension forecast.
- Exploring retirement income options, such as annuities, drawdown schemes, and state pension benefits.
- Planning for potential long-term care costs and ensuring your estate planning is in order.
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Common Retirement Planning Mistakes to Avoid
Regardless of when you start planning, there are some common pitfalls to watch out for:
- Underestimating Retirement Costs – Many people fail to consider inflation, healthcare, and lifestyle expenses.
- Relying Solely on the State Pension – While the UK State Pension provides a foundation, it is unlikely to be sufficient for a comfortable retirement.
- Not Reviewing Your Plan Regularly – Your circumstances and financial goals may change, so reviewing and adjusting your plan is crucial.
Take Control of Your Retirement Planning
No matter what stage of life you are in, taking proactive steps towards retirement planning will give you financial security and peace of mind. If you are unsure where to start or want expert guidance, attending a retirement planning webinar or seminar or meeting with a Money Guide can provide valuable insights and personalised advice.
Join a Retirement Planning Webinar with Planned Future
Planned Future offers expert-led retirement planning webinars and seminars designed to help you understand your pension options, maximise your savings, and prepare for a financially secure retirement.
Planned Future’s next open Pre Retirement Planning Webinar takes place on Wednesday 12th March 2025 – learn more and secure your space today.