If you're still in your earlier years, you might not be thinking too much about retirement. You might have a company pension that you're putting a percentage of your income into each year, but it's the last thing on your mind right now since you might as well enjoy the moment while you're young. However, as the years go by, you'll soon start wondering about your pension and how you're going to afford retirement, and the earlier you start planning for it, the better you'll feel and the richer and happier you'll be when you do finally retire.

 

1. Pay off your mortgage and any outstanding debts

One of the worst things you can do is enter retirement with a string of debt hanging onto you, so if you can get rid of these before you leave your life of work for good, you'll be a lot more independent and free when it comes to finances. If you have a mortgage, work out how many more years you'll be paying it for, and increase your monthly payments if your current payments will still be made when you've retired. Any debts you have should also be paid off before you retire, since you'll then have more money to save and less money to pay out.

 

2. Start investing

If you've never invested in anything before, it's never too late to start. There are many things you can invest it, and you don't need a huge amount of money to do it either. If you're thinking about stocks and shares, you can do online trading courses, which will help you to learn how to trade on the stock market and how you can make money (and also the mistakes you'll make which could lose you money). If you have a large chunk of money to invest, consider buying a property and either renovating it to sell on or renting out for a few years in order to provide a second source of income. You can rent the property out once you've retired if you want to have your pension coming in as well as the money from the rental property.

 

3. Save a bit each week

You don't have to save loads for your retirement – you can just open a separate bank account and save a little bit each week. You can also do this by saving into a pension fund – you will pay an external pension company each month and this will build up over the years. This is often the preferred method of saving up for a pension, since the money is often invested for you and therefore can grow significantly over the years. You won't be able to touch the money either, so it removes any temptation you might have to spend the money prematurely before you retire. If you'd prefer to save the money yourself, look into opening a fixed bank account that you cannot withdraw money from without several months’ notice or paying a penalty.