Is It Too Early or Too Late to Start Planning for Retirement?

Retirement planning is something we all must face eventually, but many people either push it aside for later or feel they've already missed the boat. In this article, I explore common concerns from clients who are either just starting to think about retirement or feel that it’s too late. Whether you're 30 and focused on other goals or you're 50 and think time has passed you by, there’s still hope. I’ll break down why timing is important, how to create the right habits, and why it’s never too late—or too early—to start planning for a secure financial future.

Is it Too Early or Too Late to Start Planning for Retirement?

Retirement is coming for all of us—some sooner than others. In my role, I often sit down with clients who haven’t fully prepared for retirement and feel like they’ve missed the window, even with 10 years left to go. On the other hand, I sometimes meet with younger clients who are focused on immediate priorities like buying properties and feel that retirement is something they can worry about later.

Is It Too Late? Not Necessarily, But Don’t Delay.

Leaving things until later isn’t the end of the world, but as you can imagine, the earlier you start planning, the better. The longer you contribute, the more time your investments have to grow through the power of compound interest, which can significantly increase your retirement pot.

For instance, if you’re 52 and want to retire at 55 but don’t have a plan in place, it’s unlikely you’ll achieve your desired retirement lifestyle in just three years. But if you’re 30 and want to retire at 55, the goal becomes much more achievable.

The Power of Compounding: A Quick Comparison

Starting early is ideal, but even if you’re approaching retirement, there’s still hope. For example, let’s say you have 10 years left until retirement and you need to save $2,000 per month to hit your goal. If you invested that amount at an average annual return of 7%, in 10 years you would have around $344,000.

Now, let’s say you ignored that advice and just saved the same $2,000 per month in a bank account, where interest rates are typically much lower, and you wouldn’t build any strong habits. After 10 years, you’d have $240,000. That’s a significant difference! And this doesn’t even account for inflation, which would erode the purchasing power of your cash savings.

Building Habits: Consistency Is Key

The most important factor in achieving your retirement goals is building consistency. It’s easy to make a savings plan, but the key is sticking to it and saving regularly. Without structure or discipline, your progress will be much slower. This is why most government-backed pension schemes are inflexible—they’re designed to ensure you save regularly without the temptation to withdraw early.

Set Clear Goals for Retirement

It’s all well and good to say you’ll save a certain amount each month, but why? You can’t properly prepare for retirement if you don’t know how much you’ll need. What are your retirement goals? How much do you need each month to live the life you want?

Before I make any professional recommendations, we need to figure out exactly what your retirement goals are. How much do you want to spend each month? Will this money cover your desired lifestyle, travel, or perhaps visiting family? And most importantly, how can we make sure that income is secured for as long as you live, however long that may be? Once we have this mapped out, we can calculate precisely how much you need to save today to fund these goals.

Tax Implications on Pensions

Another important factor to consider is the tax implications of withdrawing from your existing pensions. If you’re planning to retire in a different country from where your pension is based, there could be significant tax differences. Some pension withdrawals are taxed as high as 45%, drastically cutting into your retirement pot. It’s crucial to have a strategy in place to navigate these tax complications.

Just Make a Start

If retirement planning feels overwhelming—whether you think you’re too young or too late—it’s time to make a start. Many people procrastinate, waiting for the “perfect time” to invest. The truth is, perfect timing doesn’t exist. It’s not about timing the market but time in the market. The longer you’re invested, the better. Yes, markets fluctuate, but they tend to grow over time. During COVID, markets took a nosedive, but since then, they’ve rebounded by over 130%. It’s a clear example of the importance of staying the course.

If you feel unsure about your retirement plan, whether you’re just getting started or think you might be too late, reach out to me. I can help assess your situation and work with you to build a strategy that fits your life and goals.

Contact Me

Email: [email protected]

WhatsApp: +44 7831 481321

LinkedIn: Kieron Donovan

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