5 easy steps to plan the retirement you want

No matter when you plan to retire, it’s never too soon to start thinking about the retirement you want.

But you don’t have to be a pensions expert. Spending a bit of time now working out what you’ve got so far could help prepare you for the future and a better retirement.

Not sure where to start?

Follow our simple step-by-step guide.

Picture your lifestyle in retirement

Consider what age you will be and what lifestyle you’d like.

Step 1  about Picture your lifestyle in retirement

Gather details of your pensions and investments

Find out what all your pensions and investments add up to.

Step 2  about Gather details of your pensions and investments

Forecast your retirement

Get a forecast and find out if you are on track.

Step 3  about Forecast your retirement

Look at how to boost your retirement income

Find out what you can do to get that lifestyle you pictured.

Step 4  about Look at how to boost your retirement income

Need more guidance or advice?

Get help when making decisions about your pensions.

Step 5  about Need more guidance or advice?

Step 1: Picture your lifestyle in retirement

There’s no one size fits all when it comes to deciding how much income you’ll need for a good retirement. It depends on how you want to spend your time in retirement. If you have a partner, it’s important to talk about this together. Money and Pensions Service have a useful guide on talking about money with your partner (external link).

Some questions to help you picture your retirement are:

  • When do I want to retire?
  • Will I stop work completely or gradually move into retirement (maybe by doing part-time work)?
  • What kind of lifestyle would I like?
  • How might my spending habits change when I retire?

If you’re still not sure how much you should be aiming for – and most people aren’t – there are some helpful guidelines from the Pensions and Lifetime Savings Association (PLSA) on the Retirement Living Standards website (external link). They calculate that a single person needs about £10,000 a year for a minimum standard of living £20,000 a year for a moderate lifestyle and £30,000 for a comfortable one. For couples, the figures are £15,000, £30,000 and £45,000. But these figures are indicative only, and you should consider your own circumstances.

If you are interested in flexible retirement – reducing the hours you work and drawing on some of your pension benefits – first take a look at the pros and cons.

The pros and cons of flexible retirement

Step 2: Gather details of your pensions and investments

Most people are entitled to at least some State Pension. You can find out how much you might be entitled to using the government’s State Pension checker (external link).

It’s likely you’ll also have several different workplace pensions from different jobs you’ve had. You may also have a personal pension you set up yourself. The question is, what do they add up to?

To find out, gather together your most recent statements, or check the values online (or via an app, if your pension company has one). Our mobile app is a handy way to view your pension online.

If you plan to use savings, investments or property to finance your retirement, make sure you also take these into account.

If you think you might have forgotten about or lost touch with an old pension, the Pension Tracing Service (external link) can help.

Step 3: Forecast your retirement

You can get a forecast of how much retirement income you’ll have from your State Pension and any workplace and personal pensions you have by using a pension calculator. It can also show you what effect increasing your pension payments, changing your retirement age or changing the amount of tax-free cash you take has on your retirement income.

If you have a partner, you could do this for both of you so you have an overall view.

Pension Calculator (external link) from MoneyHelper is simple to use and can give you an estimate of the income you’ll get when you retire based on various pensions.

We also have some great planning tools to help you think about how to reach your goals.

Retirement planning tools

Step 4: Look at how to boost your retirement income

If you’ve still got some way to go to get the retirement you want, there are things you can do.

For example, you could increase the amount you pay each month into your pension or pay in a lump sum if you get a bonus from work or come into some money. Remember that investment returns are never guaranteed. So while your savings could grow, their value can also go down. You may wish to speak with a financial adviser before making any changes (see Step 5).

If you can’t afford to do those things right now, you could decide to do it next time you get a pay rise. It’s also worth reviewing your day-to-day money to see if you can find ways of freeing up some spare money to put towards your pension. We’ve got a range of useful guides to help get you started.

If you have gaps in your National Insurance (NI) record it means you may not qualify for the full State Pension. You may be able to fill those gaps by paying a voluntary contribution – use the government’s National Insurance record check (external link) to find out.

Step 5: Need more guidance or advice?

When it comes to making decisions about what to do with your pensions, it can help to get some guidance or advice. A guidance service helps you identify options and narrow down your choices but doesn’t tell you what to do or what product to buy. If you want personalised advice and a recommendation about what you should do with your pensions, then consider taking financial advice.

MoneyHelper (external link) provides free and impartial guidance to anyone with a pension question, whatever your age.

Pension Wise from MoneyHelper (external link) offers free guidance to anyone over 50 with a defined contribution (external link) workplace or personal pension who is looking to find out more about their options for taking their pension. This can be a face-to-face appointment or phone call.

You can search for a financial adviser specialising in retirement planning using the Retirement Adviser Directory (external link) from the Money and Pensions Service or Unbiased (external link).

Get in touch

If you have questions about your Royal London pension, please get in touch using our online form.

Pension scams

Finally, be especially alert to pension scammers who try to tempt you with offers of, amongst other things, high investment returns. Read more on common pension scams (external link).