When Is It Too Late To Start Planning Your Retirement?

when is it too late to start planning your retirement

The simple answer is –Never. It is never too late to start retirement planning, and it’s never too early either. Many people put off retirement planning till much later in life, and one in five workers in the UK have Zero retirement savings and face retirement poverty. However, thanks to the UK’s pension auto enrolment program, many people have started saving towards retirement from a younger age. The UK has one of the world’s six biggest pension saving systems and according to data from the World Economic Forum, however, having a financially secure retirement still faces serious challenges. The average retirement age in the UK is currently 58 and too often many people put off retirement planning till they hit their 50s.

Planning retirement from an earlier age certainly has its advantages – for example, thanks to compound interest, if you save £7,500 when you are 20 years old with 5% interest, by the time you are in your 50s, it can grow to almost £35,000. If you find that you are in your 50s and thanks to the realities of life- raising a family, growing a business and so on- you don’t have a retirement plan, no need to panic. First, you are not alone. The average person doesn’t start pension payments till they are 27years old and they are unable to keep up with payments till an average of 40 years according to data from this study. It’s not too late unless you tell yourself that it is. The important thing is for you to understand that the sooner you get a retirement plan in place, the earlier you can retire and the better your chances.

The good news is that often, earning peaks in your fifties, and the substantial adjustments to your lifestyle that you would need to make a successful retirement might be a bit of a challenge, but taking the right steps now will give you a jump start on having a financially secure retirement.

Start Saving Today

The most important thing you need to do is to start saving a large percentage of your income right away. If you can save between 10% and 20% of your gross income, then do it. It’s a lot more difficult that it sounds, but it is easily the most effective first step towards having a retirement plan. A few ways to successfully do this is to eliminate consumer debt (credit card debt), authorize an automatic withdrawal from your pay check, and send any bonuses and raises directly to your savings.

Convert any assets you can into a retirement savings

You can do this by moving to a less expensive home, and moving your equity into your savings account. You will also make a lot of savings from utilities, maintenance, property taxes, mortgage payments and more. You can also consider moving to areas with a lower cost of living, and lower cost housing markets.

These two strategies can help boost the contents of your nest egg. You can do more by reading more aggressive approaches to building a retirement savings for late starters. The most important thing to keep in mind, however, is that creating a retirement plan, whatever your age is a very urgent matter and it can never be too late (or too early) to start planning for a financially secure retirement right away.

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