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When is it too late to start retirement planning?

ByPSG Wealth Management

May 10, 2021

With complications from the impact of Covid financial pressures leaving some people wondering about delaying retirement, is there an age at which it becomes too late to begin retirement planning? PSG Wealth Management MD, Paul Gilsenan, looks into the options. 

The basics boil down to this: it really is never too late to begin putting into or planning a pension. There can, however, be a wealth of other financial pressures in older age, making this a more difficult reality – from paying for care to reducing working hours to supporting adult children struggling to get on the housing ladder, or juggling young families of their own. 

When it comes to considering your financial priorities as retirement gets closer, to make the most of a reduced period of time to save, it’s best to look in the context of longer-term goals:

  • Aim to retire when you’re confident you’ll have the level of income you need to live comfortably – retirement does not have to be an arbitrary age. Baby Boomers typically retired at 60 or 65, although that’s an increasingly unlikely option for Gen X onwards.
  • Understand how any investments are performing, and whether they could be made to work harder – for example, by understanding your risk appetite better or reviewing disparate pension pots.
  • Structure self-employed pension contributions to better suit earnings patterns and utilising available allowances.

Perhaps the most obvious way to boost your retirement savings is to increase your pension contributions, especially if you’re in a workplace scheme where you benefit from both tax relief and employer contributions.

There may even be a tipping point beyond which your employer doesn’t just match your extra contributions, but goes further. Why not ask them or check your contract to find out if that’s the case – it could make a big difference.

Improving your retirement savings doesn’t have to entail paying in more money, though. It could be that your current investments aren’t performing well enough, or that you could get better returns by reviewing your existing retirement pots to see if they could be working harder for you in the run up to the retirement you want.