One thing retirement is no longer about is age. Not anymore. Today there are new pension freedoms that provide more flexibility when one comes to deciding when and how to retire. But to get there in good financial shape takes some planning.

Your monthly budget is uniquely dependent on your personal situation and on how you balance your finances. What really counts is what you choose to do with the extra amount that you may be able to spare every month. 

Throughout the different stages of your life cycle, you will face unique challenges that require different retirement planning strategies. Three important factors around planning for retirement are: the time left until the age at which you would like to retire; how much risk you are willing to take when making your investment choices; and how much you can set aside towards retirement.

Your 20s and 30s

For many people, this is the age of financial freedom. It’s the time when you step onto a career path and experience the power that comes with real earning (and spending) potential. At this stage, retirement will probably feel a long way off. But here’s the thing – the sooner you start saving for it, the better. 

Your future self would feel quietly satisfied if you’re smart enough to get ahead of the game. 

Stepping in your 30s is all about building on what you’ve started. And if you haven’t started yet, now is the time to do it. Hopefully you’ll be in the happy position of earning more because your salary has increased with your experience. Keep an eye on your outgoings – rent or mortgage expenses as well as spending on other interests. Make sure they’re not taking a bigger bite out of your income than they need to. 

What could I be doing?

• Work out your monthly budget, so you know what money you’ve got spare to save.

• Set up a savings or investing pot – you can start small and add more later but the sooner you start, the better. If available, ensure you enrol in your company’s employee pension scheme to make the most of any matching contributions that come from your employer and also benefit from pension scheme government rebates.

Tip: Watch that spending and strike a healthy spend-save balance.

Your 40s

The is an age of maximised earning and spending potential. All being well, you could be at the peak of your career, or supercharging it by starting your own business or stepping out in another new direction. And if you’re not where you want to be, it’s not too late. But now is definitely the time to get serious about how you manage your money.

This financially powerful time is also a pivotal time as your family starts to grow up and away. Your future self would definitely thank you for taking stock and updating your financial plan.

It’s never too early to start planning for retirement, but if you have let the years pass by, it’s also never too late

What could I be doing?

• Request a financial planning meeting with an accredited adviser to see if you’re on track and work out how much extra you might need to put away every month. 

• As you repay instalments for car and home ownership, and as you raise your children, you will want to save and invest for your children’s future and to plan for your retirement.

• Take a steady approach to building your retirement pot, setting aside regular amounts of money. Freeing up a large sum of money at year-end is often difficult, so breaking down your investments into regular monthly contributions that you could afford will help. 

Tip: Put in as much money into retirement savings as you can afford.

Your 50s

The 50s decade is when those previously distant retirement goals start coming into sight. Looking after the financial welfare of your nearest and dearest is now becoming a lower proportion of your spend. This is catch-up time where you need to focus on boosting your personal savings. 

Whatever you do, don’t be tempted to coast now just because you’re nearly there. Your future self would certainly be more comfortable knowing there was something in place to protect the pension pot you’re still working so hard for. 

What could I be doing?

• Make sure your pension pot is in good shape, and if either you or your partner has taken time out, consider topping up any gaps in your state pension contributions. 

• Reassess your long-term goals and focus on planning.

• Watch your retirement portfolio and revisit your asset allocation to ensure that these are in line with your appetite towards risk.

Tip: Inject some extra contributions into your savings plan and watch out for risks or gaps. 

Your 60s

The 60s is absolutely not an age where one life stops 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, retirement can be a time of freedom and adventure where you can put your life goals into action. 

Your future self may still not be ready to press the ‘go slow’ button, so this is still a time to think longer-term and to plan for a long, happy retirement.

What could I be doing?

• Calculate whether your means meet your expectations by drawing up a budget − set out your household outgoings as well as more desirable expenses (such as holidays and hobbies).

• Feel free to keep on working – even part-time or casual hours – if it means you’ll get the lifestyle you seek in retirement.

• Unexpected costs arise at all stages of life; set up an emergency fund to cover any unplanned bills.

Tip: Keep your finger firmly on the financial pulse. 

Throughout the life cycle of retirement planning, don’t get discouraged if anything major in your life has changed, like financial and emotional downturns or career and relationship shifts. Most retirement products offer the option of premium holidays which give the flexibility of suspending or deferring the regular payment contributions for a reasonable period until you are back on track.

It’s never too early to start planning for retirement, but if you have let the years pass by, it’s also never too late. Proper financial planning and a disciplined focus on saving increases prospects for a financially sound retirement.

Muriel Rutland, Chief executive officer, HSBC Life Assurance (Malta) Ltd