Planning younger for a better retirement

To plan your retirement successfully, it helps to take action early, set realistic goals and, most of all, make sure you have enough to afford the lifestyle you want. Your free time after working is just important as your career. You’re not going to work forever, and it’s worth keeping your future in mind so that you can live your best life later. Here are some things to think about when you plan for retirement.

Think about when you’d like to retire and what it’ll look like

For a lot of people, retirement looks very different to how it may have been in the past. Fewer people today move straight from work into drawing a pension. Some work part-time and volunteer before fully retiring; others may decide to travel and then return to work.

Take some time to work out what you’d want to do with your retirement as you may not have had time for pastimes or other activities before that point. Travelling, pursuing a hobby or even starting a business are all popular options that you’ll have a lot more time to explore. Whatever your plans are, they’ll require time and a solid strategy to achieve them.

How early is too early?

Your income in retirement depends a lot on how soon you start preparing – unless you’re willing to put significant amounts of your pay away in the run up to retirement, building up a decent pension pot requires you to start saving earlier. The best time to start saving towards it is as soon as you can. Starting later means you’ll have less time to save and may need to make bigger contributions to achieve your goal.

Plus, whilst most people retire in their 60s, you may be able to retire earlier – so the earlier you can prepare for that, the better.

How your workplace can help

Many adults aren’t saving enough for their retirement – if they’re saving anything at all – and you might not want to rely solely on the State Pension to keep you going through retirement. The full State Pension of £164.35 per week for the tax year 2019/20 is below what most people say they hope to retire on.

This is where workplace pensions come in – most employers must offer them and should automatically enrol you if you’re eligible. Workplace pensions are run by employers and your pot is based on contributions taken directly from your wages, as well as your employer’s contributions. If the option’s available then it’s worth opting in to a workplace pension.

On top of employer contributions, workplace pensions also come with tax relief. Saving for your future with the help of your employer – and tax-free – is great for you. The money you would’ve paid in taxes goes towards your pension, and means you’ll have a lot more to spend in the future.

Find out more about workplace pensions.

Other things to think about

There are a number of reasons to plan ahead for your retirement. If you create a safety net for yourself from a younger age, you have less to worry about closer to the time – and it isn’t just for you, it’s for your family as well. By contributing from a younger age, you’ll have the opportunity to leave something behind for your family if anything happens to you.

Have a think about the lifestyle you’d like to have in the future, mapping out what you’d like and how you’d be able to afford it. Find out more about retirement and pensions on GOV.UK, or seek independent advce.