Retirement Saving Strategies Based on Your Age

Do you dream of a comfortable retirement, free from financial worries? Whether your aim is to travel, pursue hobbies, or spend more time with family, a well-planned retirement savings strategy can make it a reality.

In this article, Daniel Frampton, Chartered Wealth Manager at Acumen, discusses retirement saving strategies based on your age. Keep reading for retirement-saving insights through the decades, from your 20s to your 60s.

Retirement saving strategies by age group

Saving for retirement at 20

Starting your retirement savings journey early is key to a comfortable retirement. Even small, regular contributions in your twenties can grow significantly over time.

By increasing your contributions gradually over time and seeking professional advice at the earliest opportunity, you can set yourself up for a financially secure future.

“I think there’s a misconception amongst younger people that financial advice is something that only older, wealthier people should access,” says Daniel Frampton, Chartered Wealth Manager at Acumen. “However, as an adviser in my mid-twenties, I can say with 100% certainty that this couldn’t be further from the truth.

“Generating wealth and executing a financial plan that cultivates the long-term goal of achieving financial independence takes time. Starting young is a really smart move because you can start laying the foundations for a lifetime of positive saving habits while you have fewer responsibilities and major expenses,” Daniel adds.

Saving for retirement at 30

In your thirties, it’s important to contribute as much to your pension as possible, especially if your employer matches your contributions. This is essentially free money that can significantly boost your savings.

Consider opening a personal pension to bolster your workplace savings and create a contingency fund for major life events.

“By your thirties, you’re likely to have more responsibilities, debts and major expenses pulling on your budget,” Daniel continues. “You might have kids and a mortgage to pay for, which can lead to cutbacks elsewhere. However, your pension contributions should be the last expenditure you touch in the grand scheme of your finances.

“If you’ve exhausted all other options and are left with no choice, reducing your pension contributions is a last resort. You certainly wouldn’t want to stop contributing altogether. Even smaller contributions benefit from the power of compound interest, which can help your retirement nest egg to grow significantly,” Daniel adds.

Saving for retirement at 40

In your forties, you still have several decades of working life to save for retirement effectively. Maximise your contributions to your pension schemes, invest wisely, maximise your income, reduce expenses, and seek professional advice.

Consistent saving and disciplined investing are crucial to achieving a comfortable retirement.

“Your forties should be the most lucrative in terms of your earning power,” Daniel continues. “By this stage, some of the expenses that hit hard in your thirties, such as nursery fees, might not be a factor anymore. If you have slightly more expendable income at your disposal, now is the time to push on with your retirement savings.

“Middle age is a time when many people start thinking seriously about their retirement savings. Hopefully, by now you’ll have accrued a strong foundation of pension savings. But now’s the time to start looking at your investments and investing wisely within your risk tolerance. This can pay dividends for your long-term prospects*,” Daniel adds.

* Remember that investments can go down as well as up, so you could get back less than you put in.

Saving for retirement at 50

Even if you’re in your fifties, it’s still possible to save for retirement. Maximising pension contributions and investing wisely are as crucial as ever.

As is reducing any remaining debt, such as your mortgage, to free up more money for savings. Review your spending habits and create a budget to identify areas where you can cut expenses.

“By your fifties, retirement is looming large on the horizon,” Daniel continues. “This is the time when you really want to start focusing intently on your retirement savings. You’ll want to continue maximising your pension contributions while beginning to plan for an affordable time to retire or reduce your working hours.

“This is also the time when you want to protect your retirement savings. That means reviewing your investments and reducing your risk exposure. The last thing you want is for market volatility to erode the value of your pension and other retirement savings, so lower-risk investment options are essential at this stage,” Daniel adds.

Saving for retirement at 60

As you approach retirement in your sixties, you’re likely to start retirement planning in earnest. Many of the same principles that applied in your fifties will remain relevant.

Except now, you will seriously begin considering how and when to start taking your retirement income. Financial advice can help to make informed decisions.

“By your sixties, your children should be fully grown and financially independent,” says Daniel. “Hopefully, you should also be relatively debt-free by now, with your mortgage either fully or very nearly paid off in full.

If you plan to work on into your sixties, this is a great time to top up your retirement savings as much as possible.

“The big questions facing you now will be when can you afford to retire? Do you need to delay your retirement and carry on working? Will you purchase an annuity or take phased payments through pension drawdown?

These are major questions that can really benefit from the advice and counsel of a professional pension adviser,” Daniel adds.

Achieve a comfortable retirement with Acumen’s support

Retirement planning is a lifelong process that requires consistent effort and discipline. By starting early, setting clear goals, and making informed investment decisions, you can increase your chances of securing a comfortable and fulfilling retirement.

Whatever your age, however, financial advice can help you to achieve your ambitions.

For personal financial planning and retirement saving strategies tailored to your needs and circumstances, Acumen’s multi-disciplinary team of financial advisers, pension advisers and financial planners is here to support you every step of the way.

We can provide the advice, products and guidance you need to maximise your savings.

Whether you’re just starting your career or are about to step away and enjoy the fruits of your labour, Acumen is here to provide professional advice and guidance that enables you to make informed decisions.

Ultimately, we want to help you achieve financial independence and enjoy your retirement years free of financial worries.

For tried and trusted personal financial planning, pension advice and retirement planning, please contact us on 0151 520 4353 or email [email protected] to book your free consultation today.