Listen to this article

Pensions, and money for retirement is big news right now, for all the wrong reasons, mostly. How is your planning going?

We all want a comfortable, happy retirement, but recent figures from the Centre for Ageing Better shows that a quarter of people approaching retirement – five million people in all – may not have the income they require. Are you one of those finding it hard to think about money for your retirement?

It’s never too late. To aim for the right sort of money needed to retire, here are a few helpful nudges.

Start saving as early as possible

Some of us know what we want to do in our retirements, some of us don’t. But it’s important we still put money away so that there are funds there ready for when we do. Starting pension saving is best done as young as possible so your funds can take advantage of the power of compounding. This means that over time, your funds accrue interest. Which then grows the pot, which then earns more interest, and so forth.

According to MoneySavingExpert, a good rule of thumb here is to take the age you start saving for a pension and halve that number. Now save that number as a percentage of your pre-tax salary until you retire. So if you’re 50, you should be looking at saving 25% until you hang up your hat.

Read more: Are you prepared for how retirement is going to affect your mental health?

Plan your retirement needs

Everyone’s retirement costs are different. Some people will want an income that lets them continue their salaried lifestyle. Some want more holidays, or to be able to give regular gifts to their children and grandchildren. While others may be happy with a more relaxed and modest lifestyle.

To work out how much you might need for your retirement, and to tot up exactly how much you’ll need to put away each month to get there, use MoneyHelper’s free pension calculator.

Save and invest

Whether you choose to invest your pension via a stocks and shares ISA, pension fund, self-invested personal pension (SIPP) or cash ISA, it can be a great idea to compare the options on offer.

As well as finding the best accounts out there, when investing it’s a similarly great idea to diversify your portfolio so it’s not open to single-company or single-industry shocks. And as you approach retirement, putting your investments into less risky assets like bonds will protect your money as retirement approaches. Working with a financial advisor can be a good idea here.

Deal with those debts

High-interest debts from things like credit cards, personal loans, and so forth ideally need to be paid off before you retire. They can eat into your retirement savings quickly. This can reduce your quality of life and all the hard work you’ll have put into saving.

As such, try and divert money towards paying off these debts long before you retire, and seriously consider whether you want the burden of debt during and after you’re approaching retirement.

Growing and protecting your retirement funds is something everyone should do so they can enjoy a healthy, happy retirement doing the things they love most. What do you think is important when retirement planning? Let us know your comments below.