The best time to start planning for retirement is now. Pressures on state-run pension schemes are forcing governments to increase the pension age, making many of us work longer before retirement. An ageing population across the West could mean more people drawing out than are paying into the system.

In the UK, runaway inflation has cast doubt over the British government’s continued ability to maintain the triple-lock pension guarantee. In our uncertain world, we might not enjoy the same state-backed retirement securities as previous generations have. That’s why it is important to consider your retirement plan sooner rather than later.

How much money will I need to retire? 

The first step in developing a retirement plan will be working out how much money you will need to live on after you leave the workplace. Typically, a person in retirement will have less disposable income than they would while employed, making it essential to budget. 

The government advice service Money Helper says retirement spending can be categorised by essential expenditure and discretionary income. Essential expenditures will cover day-to-day costs, such as grocery shopping, utility bills, travel and housing. Discretionary income refers to money spent on luxuries, like day trips or eating out.

The next step is calculating your retirement income, including state pension and defined contribution pension pots. Other income streams might include passive income from property, stocks and other investments. The advice service’s free budget planner tool could be a helpful budgeting aid.

Do I need financial advice to plan for retirement? 

According to the consumer advice service, ‘Which?’ Magazine, you should consider consulting an accredited financial advisor about your retirement plan:

An introductory financial planning session with a deVere advisor could be the first step toward creating a comprehensive financial plan that secures a nest egg on which you can rely throughout your retirement. 

As one of the world’s leading financial advice firms, deVere is well-placed to create a plan which meets your unique needs and can take on the burden of navigating the complexities of retirement planning.   

It’s getting more expensive to retire 

When inflation exceeded 10 per cent in the UK last year, doubts were raised over the government’s ability to increase the state pension in line with living costs. Those fears resurfaced in March, following an independent report into the cost of the triple-lock pledge to ensure pensions rise in line with inflation.

More and more of us are living longer, which is good- but longevity comes with a price tag. While before, people might have spent 10 or 20 years in retirement, now we can expect to spend as much as 40 years of our lives retired – or even more. The extra costs associated mean that the preparations you have in place for retirement might not be sufficient, which is why planning to ensure your long-term financial security is vital. 

One way to boost your retirement income is to check to see if you are not claiming money to which you are rightly entitled. A leading charity, Age UK, says that each year £3.5 billion goes unclaimed by older people that should otherwise be paid to pensioners, and some of that money might be yours. The charity’s benefits check calculator will help you see if you’re missing out on money to which you are entitled. In addition, it is prudent to check that you don’t have any savings or other banking accounts which have gotten lost. 

How to know if I’m prepared to retire?

A study from McKinsey revealed that 80 per cent of Americans were unprepared for their retirement. The report found: “Many prospective retirees feel that they lack assets and the financial know-how they need for a confident retirement.” The findings highlighted the importance of securing qualified financial advice when making complex plans such as planning for retirement. 

One of the best ways to increase your income for retirement is through investments. Consumer advice service Money Supermarket says that investing should be considered when saving for retirement. Although it notes investments can come with risks, it outlines several investment decisions that can result in tax-free returns – and advises to speak with a financial advisor before committing to any investment decision.

Should I invest for retirement?

Strains on state pensions, more of us living longer lives, and increased costs associated with retirement mean that some people can find their budgets stretched once they leave the workplace. Setting up a retirement plan which invests for the future will help generate the income you need to enjoy a long and happy retirement. 

It’s never too early to start thinking about a retirement plan – on the contrary, the earlier the better. Many analysts believe that by contributing 10 per cent of your annual income toward your pensions, through investments, or private and public pension schemes, you will be well-set to enjoy a quality lifestyle once you retire.

Long-term investments across a diverse portfolio can minimise risk and capitalise on market gains which beat inflation more years than not. Forbes Advisor says that when investing for retirement, we should take a long-term view. Always speak to a financial advisor before making investment decisions.