Planning for retirement

Why you should think about retirement now?

Thinking about retirement may seem far off, but starting to plan – even with small steps – can make a big difference to your future security. The earlier you begin, the more time your savings have to grow through compound interest.

Use guides like starting your pension, the checklist to review your pension, and the budget planner to track your progress and adjust your plans as your circumstances change. Getting professional advice and reviewing your pension regularly will help ensure your arrangements match your needs and goals. 

Why is it important to start planning for retirement early?

Starting early – even with small amounts – gives your savings more time to grow, thanks to compound interest. Delaying pension planning can risk your financial wellbeing in retirement. 

What are the common approaches to retirement planning?

• Forever young: You haven’t started planning, feel it’s too complicated or think there’s plenty of time. This can risk your future financial security.
• Wait and see: You have some arrangements in place, such as relying on the state pension or an employer pension but aren’t sure if it’s enough. Life circumstances and expenses change, so regular reviews are important.
• Life planner: You actively review your pension every year or after major life changes, seek professional advice and ensure your arrangements match your goals and needs.

What steps can you take to connect with your future self?

• Start with starting your pension for a step-by-step guide.
• Use the checklist to review your pension to keep your plans up to date.
• Track your spending and savings with the budget planner.
• Seek professional advice when needed and ask the right questions about your pension.

What tools and resources can help you plan for retirement?

• Checklist to review your pension
• Fees and charges
• Personal pensions
• Budget planner
• Meeting your financial advisor

How can you keep your pension plans on track?

Invest a few hours each year to review your pension arrangements, update your plans and ensure they reflect your current needs and future expectations.

How do you estimating how much you’ll need in retirement?

It’s a good idea to work out how much income you’ll need to maintain your desired lifestyle in retirement. Start by listing your expected expenses, including housing, food, utilities, healthcare and leisure.

Many experts suggest aiming for a retirement income of around 50 to 60% of your pre-retirement salary, but your needs may vary. Use the CCPC Budgeting resources to help estimate your target.

What to do if you’re starting pension planning later in life

If you begin pension planning later in your career, you may need to contribute a higher percentage of your income, adjust your retirement expectations or consider making lump sum payments.

Consider increasing your contributions, delaying retirement or making lump sum payments if possible. Getting independent financial advice can help you make the most of your remaining working years.

Common pitfalls and how to avoid them

Some common mistakes when planning for retirement include underestimating expenses, not reviewing your pension regularly and failing to account for inflation or investment risk.

To avoid these pitfalls, review your pension plan at least once a year, keep track of charges and fees and make sure your investments match your risk appetite and retirement goals.