What will your retirement look like? Do you dream of spending more time in far-flung places and making memories with your family? Are you hoping to learn new skills and try out new hobbies? Or are you planning to improve your tennis swing, run marathons - or even climb Mount Kilimanjaro?

If this is the kind of retirement you have in mind, a State Pension is definitely not going to cut the mustard. That’s why it’s essential to start saving for retirement as early as possible.

Here, we summarise what you need to start thinking about in your 20s, 30s, 40s, and even 50s, to ensure you achieve the retirement you aspire to have.

Good money management is a learned skill; it's not something we're born with

Saving for retirement in your childhood and teenage years

No one expects children to save their pocket money or put their birthday tenners into a pension fund. And by the time they become teenagers, a new-found desire to ‘live in the moment’ means any spare income will probably be spent on instant gratification rather than retirement planning!

But that doesn’t mean you shouldn’t introduce children to the concept of saving. Good money management is a learned skill; it’s not something we’re born with. Teaching them the benefits of saving money, whether it’s for a rainy day, a first home, or towards a retirement plan, is something that will stand them in good stead and stay with them for a lifetime.

Child pension funds are a tax-efficient way for relatives and godparents to save a small amount that will grow over many decades, giving a young person a head start towards their retirement plans. And thanks to the power of ‘compounding’, any money invested early on will grow into something much more significant down the line.

But it’s important to remember there are other, more flexible ways to save money for a child’s future. A Junior ISA, for example, can be accessed once a child turns 18. And because they won’t have to wait until retirement to access it, that money could be used to help pay for a first car, university fees or even towards a first home.

Saving for retirement in your 20s

Your 20s are the perfect time to start a pension. You’re still likely to have 30 to 40 years until your retirement, which means you can save less each month than if you were to start saving later in life.

You may have graduated from university and are starting your first ‘proper’ job. At the age of 22, you’ll automatically be enrolled in your workplace pension, as long as you’re earning £10,000 or more. The minimum contribution is 8% of your income, of which your employer must contribute 3%.

Generally, the advice is to save as much as you can, but there will be many competing demands on your income during this period: rent, work travel, clothes, holidays, not to mention socialising. It’s therefore important to be realistic about how much you can save each month, but even a small amount now is better than nothing.

Saving for your retirement in your 20s will give you the time to build up a substantial fund for your retirement. You can afford to take a few more risks with your investment portfolio choices, which have the potential to yield higher returns. And if they don’t work out, you’ll have time to recuperate any losses

It's worth thinking about the kind of retirement you want

Saving for your retirement in your 30s

Your 30s is the period when all those big expenses tend to kick in. It’s typically when you’ll settle down or get married, start a family and buy a home. But it’s also the decade that your career begins to take off and your salary increases, which will hopefully leave you enough to save a little bit more towards your retirement.

As in your 20s, the general rule of thumb is to save as much as you can afford. It’s better to save a little over a longer period than having to make larger contributions as you get closer to retirement.

It’s also worth thinking about the kind of retirement you want. What age do you want to retire? How much will you need each month? Think about your dreams and aspirations. All of this will help motivate you to save as much as possible – even if it means making small sacrifices to your current lifestyle.

Saving for your retirement in your 40s

By the time you reach your 40s, you should be well on your way to building a healthy retirement pot. If you haven’t started saving by the time you reach 40, it’s certainly not too late – but you will need to start saving as much as possible.

You are likely to be established in your career with a salary to match. While financial commitments are still significant, your income means you’ll be able to put more effort into your retirement saving strategy.

As part of this, you may also want to consider other retirement planning and investment options.

For example, if your children have left home, you could consider downsizing to release some equity and reduce or pay off your mortgage. If you have the means, you may want to use some of that equity for a deposit on a ‘Buy-to-Let’ property. As well as an investment which is likely to grow in value, the rental yield will be a useful additional revenue when you retire.

Top up your pension to ensure you’re taking the most tax-efficient route to achieving your retirement goals

Saving for retirement in your 50s

Your 50s are likely to be a time of high earnings and fewer financial commitments. Children may have left home, and your mortgage might almost be paid off or the payments are low in relation to your salary.

This is the perfect opportunity to appraise your overall retirement ‘pot’ – which includes your pension, property, savings and investments – and top up your pension to ensure you’re taking the most tax-efficient route to achieving your retirement goals.

There have been significant changes to pension savings in the Spring Budget 2023 that may impact your retirement planning. To find out more, see: How does the 2023 Budget affect your pension and retirement planning?

An Amber River financial planner

Whatever age you are, an Amber River financial planner can help you plan for the retirement you want. Whether it’s starting your first pension in your 20s, giving you the flexibility in your 30s, consolidating your pensions in your 40s, or ramping up your investments in your 50s, our financial planners will work with you to ensure your dreams become a reality.

Get in touch

To speak to one of our team, arrange an appointment or find out more, call 0800 915 0000, or alternatively use our contact form here.