Image courtesy of Kevin Trotman
Image courtesy of Kevin Trotman

Whether you are close to retirement or a long way from it, it is never too early to start planning. The sooner you start planning, the sooner you can start to build up a retirement fund, which you will be able to live off when you retire. It can be a rather daunting task to plan it out, so below are so steps that you can follow to get you started.

Work out retirement age
It is worth starting with considering what your retirement age is likely to be. This will obviously depend on your job as some jobs have a fixed retirement age and others do not. It will also depend on what you personally want as you may prefer to retire early or want to continue working into old age.

Calculate what retirement income you need
You also need to think about how much money you will need to have in retirement. Consider what your bills will be. You may have paid off your mortgage, but if you are renting you will continue to pay rent. You may intend to live somewhere smaller so bills may be cheaper, but you may have to pay for carers or care homes.

Consider the income you want
Consider how much you will want to pay for hobbies and holidays on top of the necessities. It could be a lot more than you imagined it would be. You will want to enjoy retirement and be able to spend it doing things that you miss out on when you are working. This may come at a cost and so you will need to allow for this.

Assess pension funds
Once you know when you need the money and how much you want, you will be able to calculate how much you will need to pay in. You should be able to find a pension calculator online that will help you with this. Then you have the task of deciding which pension fund to use. Take a lot of time picking between them and researching the differences. Remember to look at the costs as well as the return. You may want to seek independent financial advice as it is a big decision to make.

Start saving
Once you have made your choice it will be time to start saving. You will ideally want to put a certain amount a month away towards your retirement. Most funds would require a direct debit payment so that you will not forget to invest.