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How to plan for retirement

Planning your retirement has arguably never been more important - here's what you need to know.

In this article
Why do I need to plan for retirement? How do I plan for retirement at different ages?
Retirement planning checklist

Why do I need to plan for retirement?

Retirement planning has evolved rapidly over the last couple of decades. Fewer people enjoy the guaranteed income that comes with a final salary pension, and you now have to wait for longer to qualify for the state pension

In short, having plenty of money in retirement is on you shoulders - so the more prepared you are, the better your retirement will be.

It can be a boring subject for some. However, the end goal is to make you richer in retirement, which should provide a major incentive to be proactive. 

The good news is that there’s lots of help that you can get to understand what’s best for you:

This guide will help you understand what you need to do for your retirement at different stages of your life and comes with a helpful checklist as your retirement date draws nearer. 


How do I plan for retirement at different ages?

Starting to think about your retirement, and preferably contribute substantially to your pot, as early as possible is the ideal strategy.

Real life, however, will often mean that this is easier said than done. Other financial commitments – paying off student loans, getting on the property ladder, starting a family – will invariably be prioritised in your 20s and 30s.

This part of the guide will highlight some things you should be thinking about at certain ages, even if the main build-up of your pension savings comes later. 


Retirement planning in your 20s


What you need to know:

  • You'll be automatically enrolled into a pension by your company
  • You're required to pay in at least 5%
  • You can opt out - but it's not wise to do so. After all, you're getting free money from your employer

What you need to do:


Retirement planning in your 30s


What you need to know:

  • Having a baby won't affect your National Insurance contributions
  • Starting to build up your pension pot requires your attention
  • If you've switched jobs, your old pensions stay with your old employer

What you need to do:

  • Put away as much as possible - you can add more than your employer requires you too
  • Keep pension going despite other priorities (eg wedding, home, children)
  • Put your pension savings in high-growth investments


Retirement planning in your 40s


What you need to know:

  • Some people in this age group may have a final salary pension, which pays a guaranteed income at retirement.
  • This could form a foundation of your pension income, so work out how much you need to have a comfortable retirement.
  • You have around 20 years until you reach retirement age.

What you need to do:

  • Check your state pension forecast to see if you're on track for state benefits
  • Assess the size of your pension pot and find out how the money is invested
  • Make sure you update old pension schemes with new contact details
  • Think about increasing contributions (make the most of pay rises and bonuses)
  • Consider opening a SIPP


Retirement planning in your 50s


What you need to know:

What you need to do:

  • Think when you might want to retire
  • Get a state pension forecast
  • Increase contributions if your earnings will allow
  • Consider the need to support grown-up children


Retirement planning in your 60s


What you need to know:

What you need to do:

Retirement planning checklist

As you approach the last few years before your planned retirement there are some key things to consider.

Our checklist will help you to do all you can to ensure a smooth transition into your post-working years. 

1. Get an idea how much your retirement income is likely to be

Your pension fund should build up over your working life, but you may not have an idea how much you are on track to end up with. 

Pension statements are useful to indicate the annual retirement income likely to be generated by your final salary pension or the current fund size of a defined contribution plan. 

Use our pension calculator to get an estimate of how much you will have. 

2. Check your state pension

The rising state pension age (SPA) means that people are getting this regular government-provided income at a later age. However, once you do receive it the state pension can provide a major boost to your finances. 

A couple claiming the full basic state pension will receive £14,752 a year under the old system, or £19,256 if they're both eligible for the new state pension (assuming they receive the full level of new state pension – many will receive less).

A state pension forecast will help you to gauge how much you’re on course to get from the government.

Find out more in our guide to how much state pension will I get?

3. Track your expenditure before you retire

How much you spend in retirement will vary as you move through the different post-employment stages. Having an idea of expenditure levels will certainly help you to plan for the longer-term. 

You’re likely to have less money to live on than previously, but you may be mortgage-free and travels costs related to work will disappear. 

Our guide highlights three levels of spending – for essentials, a comfortable retirement (allowing a few extras) and a more luxurious lifestyle.

Find out more in our guide to how much will I need to retire?

4. When should you start drawing your pension?

There is now much greater flexibility in the ways that you can access your retirement savings and when you can start withdrawing the money.

You don’t have to stop working to take your pension – as long as you are aged 55 and over. The earlier you start taking your pension, however, the earlier you might find that the pot starts to deplete. 

Find out more in our guide to what can I do with my pension pot? 

5. Get professional help and advice

You’re not on your own when it comes to making financial decisions in relation to retirement. 

If you have some complex decisions to make, it is probably best to talk through the options with a financial adviser.

For an overview of your options for using your pension pot, you can call the Which? Money Helpline or use Pension Wise – the free and impartial service backed by the government.

Find out more in our guide to how to get retirement and pension advice.