When you’re young, retirement can seem like a distant concern. But no matter what your current age or income level, putting some thought into how and when you want to retire is crucial to ensuring your golden years are as secure and comfortable as possible.
There’s no one-size-fits-all when it comes to retirement planning, so we’re not going to tell you how much or little to save each month. Your personal savings plan should be the result of a personally tailored strategy, with the help of a financial adviser. In this guide, we’ll provide some useful tips and information to help you understand the broader goals you should be working towards at each stage of your life.
Your twenties is the age of financial freedom. It’s the time when many people take their first steps onto a career path and experience the power and responsibilities that come with earning and spending.
At this stage, retirement probably feels a long way away. But the sooner you start saving for it, the easier your journey will be. Putting even a small amount of your salary away at this stage will put you ahead - and your future self will thank you for it.
What could I be doing?
Work out your monthly budget to see how much disposable income you could be putting into a savings plan
Review your company’s pension scheme to make the most of any matching contributions that come from your employer
Set up a savings or investing pot. You can start small and add more later but the sooner you start, the sooner you’ll start earning interest on your capital
The twenties mantra: Spend sensibly and save as much as you can.
Your thirties are all about building on the foundations you laid in your twenties. If you haven’t started saving yet, now is the time to do it.
As your work experience increases, your salary will hopefully increase during this decade too. Keep an eye on your outgoings, like rent or mortgage payments as well as spending on holidays and other hobbies. Even a thrifty person can find that they’re spending more than they need to.
During this highly changeable period of your life, retirement planning can feel more difficult if you're starting a family or maintaining a household. It's worth thinking about creating a separate savings pot to help you meet these challenges head-on, without losing focus on your long-term financial goals.
What could I be doing?
Every time you get a pay rise, consider adding 1% to your pension pot and do it before you get your next paycheque, so you don’t feel the loss
Take a more active interest in your finances through free resources such as online budgeting tools, retirement planning apps and pension calculators
The thirties mantra: As your career blossoms, make sure your pension savings don’t wither on the vine.
The forties are an age of major earning and spending potential. You could be at the peak of your career, or supercharging it by starting your own business or stepping out in another direction.
You may even have paid off your mortgage and freed yourself of debts. And if you’re not where you want to be, it’s not too late. Either way, now is definitely the time to get serious about how you manage your money.
This financially fruitful time is also a pivotal moment for your family life. If you have children, they may be starting to grow up and make their own lives – and you’ll want to support them on their journey.
What could I be doing?
Check your pension to see if you’re on track and work out how much extra you might need to put away every month
If you’re willing to take some risk, consider investments such as shares or funds, or even property - as other future sources of income to enhance your pension pot. It's worth keeping in mind that all investments carry some risk and their value can fall below the amount that you originally invest
Set up a separate savings or investments pot for your family’s future so you can help out with education and other key costs to give your children the best possible start in life
The forties mantra: Time to get serious. Even if you have a savings plan, could you be doing more?
As you head into your fifties, looking after your loved ones is no longer your first priority. This is the time you should focus on boosting your savings to secure your future.
Whatever you do, try not to be tempted to coast as you reach the finish line of your savings journey - it’s best to make sure there’s something to protect the pension pot you’ve worked so hard for. This is particularly important if you’ve experienced any major life changes such as financial downturns, career changes or shifts in your personal life.
What could I be doing?
Make sure your pension pot is in good shape, and if you have a life partner, make sure you’re on the same page and that their savings targets are on track as well. If either of you has taken time out, consider topping up any gaps in your state pension contributions
Be savvy about any further expenses related to retirement. This will depend on your circumstances – and remember that your expenses could change in the future and can vary from country to country
Consider consolidating any dormant pension schemes - although be aware the investment risk to your capital and of any exit fees involved
Start thinking about estate planning and ways you might want to leave your financial legacy
The fifties mantra: The window of opportunity is closing – it's time to inject some extra rocket fuel into your savings plan.
Entering your sixties is not necessarily a moment when one chapter of your life closes and another begins. It’s a gradual transition, and one that you should be in control of. So if you don’t feel emotionally or financially ready to stop working, you don’t have to.
If you plan well, this decade can be a time of freedom and adventure where you can finally put your long-term goals into action. Whether you’re embracing a slower pace of life or continuing to work, this is still a crucial time to think of the future and put the final pieces in place for a long, happy retirement.
What could I be doing?
Draw up a budget to work out whether your means meet your expectations - set out your household outgoings as well as more wants such as holidays, hobbies and major life events for your family
Feel free to keep on working if you are able to – even part-time or casual hours – if it means you’ll get the lifestyle you want in retirement
The sixties mantra: The time to reap the rewards of a lifetime is approaching, but don’t forget to keep your finger firmly on the financial pulse.
If you’re looking for a more personally tailored approach to savings and retirement planning, our dedicated wealth specialists are on hand to help you devise a strategy.
To book your initial consultation, call us on 441 299 5959 or request a callback using the link below. Premier customers should reach out to their Relationship Manager in the first instance.
Whether you’re growing your savings or planning for retirement, discover how HSBC can help give you the tools to make your money go further.
Whatever your financial goals might be, working with a dedicated financial planning professional can bring you one step closer to achieving them.
It’s never too early to start putting money aside for retirement. Discover how much you should be putting aside to help ensure that your golden years are comfortable and free from financial worries.
The value of investments and any income they generate can go down as well as up, meaning you may not get back the full amount you invested. Past performance is not indicative of future performance.
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Issued by HSBC Bank Bermuda Limited, of 37 Front Street, Hamilton Bermuda, which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority.