When to retire? Practical ways to secure comfortable retirement

Best Retirement Plan

Now you know how you can invest it’s time to take the next step: deciding where the best place will be for your money or making sure your existing investments are right for you.

Now is the time to re-examine your goals.

When do you want to retire? And when will you realistically be able to afford to retire? What are your other financial priorities? – children, moving home? Are you planning to retire abroad? All these factors are important because they will dictate not only how much spare money you have to invest but also how much you will need in later life to sustain your standard of living.

Use a pension calculator to work out how much money you will need to put away to fund your “dream” retirement. This will enable you to examine the effect on your likely pension pot of putting away different sums of money each month. This is probably a good time to consult a professional financial adviser.

You will have different priorities at different stages of your life, all impacting your ability to prioritise pension planning. The following is a summary of the type of issues you may need to consider.

Your Twenties

Money is likely to be tight because you are probably taking the first steps in your career – often in lowly paid jobs. Finances may be stretched by paying off hefty university debts and you may be paying large sums in rent – as well as funding a healthy social life.

However, it’s important to at least make a pension start – even if what you can afford to put away equates to just a few pounds. You could really feel the benefit later in life of any money you put away now as it will be earning for you from day one. If your employer offers you a pension you should seriously think about joining it as your employer will probably also contribute. If one is not available you may want to consider a private pension or an Isa - savings flexibility and easy may be very useful at this stage.

Your Thirties

Despite the fact that you may well be more settled in your career and starting to earn a better salary, your thirties can often be a financially stressful decade. As well as being the time when you’re likely to be taking your first steps onto the property ladder, it’s also a popular period for settling down and having children – which will inevitably hit your finances!

Once again, joining an employer’s pension scheme is a worthwhile consideration – if they will also contribute, but if not it’s time to set up a private plan. If you haven’t started a pension that should be your priority and if one is already up and running check back to make sure you are paying in enough. You might even be considering other investment vehicles.

Your Forties

Most people will be established in their career by their forties, often at the peak of their earning power. Many will be enjoying the benefits of their hard work, perhaps with regular foreign holidays.

If you’re only just starting to save for your retirement now then you’ve already wasted the best years so now’s the time to knuckle down and start putting money away as a matter of urgency. As well as clearing any outstanding debts, including credit cards and other loans, look to increase the amount you save to at least 15% of your salary.

Your Fifties and Sixties

If you have avoided starting a pension until you are in your fifties you have left yourself with an uphill struggle – it is never too late, but you may need to save a significant proportion of your salary from now on. Professional advice should be taken.

As a general guide, those who have pension pots invested in riskier funds should look to move some of their money into less racy funds to minimise

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