What can I do now for my retirement?

There are two things to consider when thinking about retirement: first, the amount of income you need to fund it and second, what your life is going to be like in retirement. These are really different things but as time passes they do start to converge, as the reality of the amount you have saved compared to your aspirations starts to become more real.

1. Start saving little by little, as soon as you can

There is so much happening now that needs attention and money: rent or a mortgage, family, holidays, eating out, the list goes on. But the younger you are when you start saving for retirement, the smaller the amounts you need to put away will be. These small amounts really will add up over time, so don’t limit your thinking about retirement - focus on the possibilities instead. You can talk to your employer and friends and family to find out what others are doing to give you some ideas.

2. Consider your income in retirement

The pot of money you have in retirement can come from lots of sources, in addition to your pension. Hopefully over the years heading to retirement you will have paid off your mortgage, and be sitting on a good-sized asset which can be used in a number of ways. First of all, once you own your home outright, you will have freed up the amount of your mortgage repayment. If you can do this ahead of retirement then this is a handy amount to bolster your retirement savings. And once you are retired, you will have a debt free roof over your head for life. This gives you choices in later life such as downsizing, or releasing money from your property.

You might also consider becoming a buy-to-let landlord, purchasing properties to rent out and ultimately providing opportunities for additional income in your retirement (assuming property prices have gone up!)

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