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What would I tell my younger self about retirement?

Friday, January 8, 2016

What advice would today's generation of clued-up retirees give their younger selves about money, retirement and saving for the future?

  • Start early - and that means in your 20's
  • Save while you can afford to do so
  • You don't have to spend loads to have a good time

What if you could turn back the clock and give your younger self some important and useful life lessons? How great would it be to hear advice that is genuinely helpful, from people who’ve got it right?

With the help of some financially smart retirees we’ve come up with some tips on how to make things work in your favour when you are saving for the future.

Start as early as you can

“It is never too early to start saving for your future and your retirement – that is the advice that I would give anyone,” says Paul Birch, who retired from the financial services industry eight years ago and now works as a coach and therapist.

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Paul has personal experience in senior executive positions in FTSE 100 companies and had a successful career in financial services. He believes it is important to plan ahead for retirement, even when you are in your 20s.

“I would tell my younger self to start pension planning at 25. You do not know if you will be able to continue to fund your pension contributions in the future so make payments in when you can,” he says.

Make it a habit

“I would tell my younger self to make retirement saving a habit,” says Michael MacMahon, writer, speaker, financial author and a septuagenarian who hasn’t yet taken the decision to retire.

“You need to make regular contributions and start young if you can. In my case, my employer helped pay into my pension when I was an employee and I started a pension at 20. Then I went freelance in my 40s and stopped paying into my pension.

“During my 40s and 50s I had a break from contributions because I was running my own business and I didn’t really feel that I could pay into a personal pension.”

Paul Birch suggests that if you are self-employed you could take an opportunity to make extra contributions when you have some spare money.

“If you have a year that is profitable, make sure you tuck some money away in your pension.”

Enjoy yourself

Although it is important to save for your future, you should also enjoy life as you go along, says Eric Marshall, who is now retired but who worked as a financial adviser for many years.

“Take time to enjoy yourself but think about how you can have a good time without blowing the budget,” he says. “When I was in my 20s and 30s and had a young family I still found ways to go on holiday without blowing the budget.

“You shouldn’t have to work because you can’t afford to retire. I planned ahead – I wanted to retire at 55 and I hit that target and retired just before my 55th birthday. It was because I had made sure my finances were on track to achieve this.”

“When you have a family you can maybe take a break from contributions and go on holiday and make the most of spending time with your children,” says Paul Birch. “Then later on you can increase your contributions again.”

Review your arrangements regularly

“I would tell my younger self to review their pension every time they get a pay rise,’ says Eric Marshall “When you get a pay rise, increase your amount and if you are setting up a pension start at a level that will actually make a difference. Then you will on your way to financial freedom in retirement.”

It’s never too early to start planning for your retirement, but make sure that if you are putting money aside, you are realistic about how much you can afford so that you can also enjoy the here and now. Speak to a financial adviser if you want any help planning your retirement.


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LV=, County Gates, Bournemouth, BH1 2NF, UK