Checklist for planning your retirement
You can decide to retire at any age, but it takes some planning to get there in top financial shape.
Whether in your 20s or 60s, we have helpful tips for helping you financially prepare for the future.
We won’t tell you how much you should save – everyone’s monthly budget differs. What counts is what you choose to do with any money you can put aside.
Here’s a checklist of what you could do now, depending on your age.
https://youtu.be/CicJD-k-PTs
How to plan for retirement in your 20s: the sensible starters’ decade
The 20s decade is the age of financial freedom. It’s often when you enter a profession and encounter the power that comes with real earning (and paying) ability.
At this stage, retirement may feel a long way off. But the sooner you start saving, the better off you’ll be.
What you could be doing in your 20s:
Start a financial action plan
Work out your monthly budget to know how much money you can save.
Ensure you’re enrolled in your workplace pension scheme and benefit from your employer’s matching contributions (‘free money’).
Make regular savings
Whether you save or invest, you can start today with a small amount and add to it. This way, you’ll soon be earning interest on your interest. The 20s mantra: watch that spending and save when you can.
How to plan for retirement in your 30s: the serious savers’ decade
The 30s decade is all about building on what you’ve started. And if you still need to start, now is the time to do it.
You’ll be earning more because your salary has increased with your experience.
Monitor your outgoings, including household bills, subscription services, and other expenses. Make sure you’re spending only what you can afford.
What you may be doing in your 30s:
Add an extra 1% to your pension pot
Consider doing this every time you get a pay rise – before you even get the extra money, so you don’t miss it.
Maximize your ISA (individual savings account) grant
You can keep up to £20,000 in the current tax year, and your returns will not incur UK income tax and capital gains tax. The value of these benefits will depend on your circumstances, and tax rules could change.
Embrace new technology
Take a more active interest in your finances through online money management tools—or try a retirement lifestyle calculator.
The 30s mantra: it’s time to stash some cash.
How to plan for retirement in your 40s: the influential players’ decade
The 40s decade is an age of significance. The 40s decade is an age of big making and paying possibilities. All being well, you could be at the top of your career or soup up it by starting your own business or stepping out in another direction
But if you’re not where you want to be, there is still time to save for retirement. Now is the time to take a long, hard look at how you manage your money, including any debts you may have.
You can also update your financial action plan.
What you could be doing in your 40s:
Mind the gap
Use the retirement calculator to see whether you’re on track to achieve your desired lifestyle. Find out how much state pension you could get, and see if you can cover any gaps in your National Insurance contributions.
Consider investing
If you’re willing to take a little risk, investments—such as a ready-made portfolio—could be a great way to enhance your retirement pot. However, the value of investments can fall and rise.
Set up an independent savings or assets pot.
You can save money for your family’s future or a lifelong dream you wish to pursue.
The 40s mantra: inject some extra rocket fuel into your savings plan.
How to plan for retirement in your 50s: the financial-focus decade
The 50s decade is when those previously distant retirement goals start coming into sight – scarily fast. This is catch-up time where you need to focus on boosting your savings.
Don’t be tempted to coast now just because you’re nearly there. Significantly, if anything significant in your life has changed, like financial and emotional downturns or career and relationship shifts.
Protect the pension pot you’re still working hard for if anything happens.
What you could be doing in your 50s:
Make sure your plans are in good shape
Invest some time in improving your financial well-being. Make sure you have a clear picture of what you want your retirement to look like. A retirement calculator can indicate whether you’re on track.
Be savvy about the tax you’ll pay in retirement.
If you have a partner and one of you is a higher-rate taxpayer and a basic-rate taxpayer, it could make financial sense to boost the basic-rate pension pot. Again, this will depend on your circumstances – and remember that tax rules could change.
Consider combining your pensions.
You could consolidate your pension schemes, although be aware of the loss of existing benefits and exit fees involved.
Start thinking about estate planning.
Find out about how to manage your inheritance tax bill.
The 50s mantra: keep your eyes on the prize.
How to plan for retirement in your 60s: the live-life decade
The 60s decade is not an age where one life stops and another begins. It’s a gradual transition that you should be in control of.
If you plan well, leaving your job can be a time of independence and adventure when you can put your goals into action.
What you could be doing in your 60s:
Create a budget
Calculate whether your means meet your expectations by creating a budget. Set out your household outgoings and more desirable expenses (from holidays and hobbies to birthdays and events).
Feel free to keep on working.
More and more people are enjoying ‘semi-retirement’ as the best of both worlds. Set up an independent savings or assets pot.
Live your best life in later life.
Think about what you’d like to do when you retire to give yourself something to look forward to. Perhaps it’s spending more time with family, traveling, doing a DIY project, or learning a language – now is the time to plan for the fun stuff.
The ’60s mantra: look forward to your future.
Go forth and share the wealth.
Don’t worry; we’re not suggesting you dish out your money to everyone.