With so much going on in our lives, it can be hard to look past the here and now, let alone imagine what our personal futures will look like. However, setting aside some time to prepare a retirement plan is one of the most valuable steps you can take towards getting ready for the post-career life you’ve always wanted. It can also help you to improve your financial wellbeing – both now and into the future.

Our research has shown that only 1 in 3 of us have a retirement plan that goes beyond a year – it’s time we changed that. ¹ Along with a pen and paper (or digitally if you prefer), here are some tips for writing a successful and personalised retirement plan.

Planning for your retirement

A successful retirement plan is about balancing your financial situation with your newly defined goals and creating a timeline of tasks and milestones that will help you make better financial decisions as you prepare for your post-work life.

1. Envisioning your future self

Firstly, having a concrete picture of what you would like your future and retirement to look like, gives you a clear foundation to build your retirement plan. It can enable you to create long-term plans that are attainable, personal and easier to stick to.

One aspect of financial wellbeing is about concentrating on what brings you joy and purpose and it can be helpful to frame all of your goals through that lens. For example, in retirement you may find joy in taking a well-deserved holiday, or feel a sense of purpose in making a charitable donation to a cause that’s close to your heart. Whatever you wish to achieve, finding joy and purpose should be at the centre.

Setting a personalised statement can help give a clear focus of the lifestyle you’d like, for example ‘When I retire, I want to live close to the beach’. You can then break it down into smaller goals. Your goals should always be clearly defined and realistic to your situation, as this will make it easier to track your success and possibly empower you to stick to the plan and decisions you’ll soon make.

2. Understanding your retirement income

At the foundation of your retirement plan, you should write down your retirement income target so it’s clear to you what you’re aiming for. Establish the different forms of income you could rely on in the future – such as any savings or investments, workplace pensions, owned assets and your State Pension. Each of these sources will be subject to different terms and growth, so getting ahead of the game and writing down what will be available to you, and when, is an effective way to start your retirement planning early.

Your pension(s) is likely to be your main source of retirement income. Even though pensions might seem like a tricky minefield, there are plenty of resources and tools available to help you. If you want to find out what type of pensions you have, how to get the most from your contributions and when you plan on accessing them – pension calculators can be a great way to get an idea of what income they’ll provide you with in the future. If you’re aren’t quite sure what a pension is or where to start, read our article on the pension basics.

By making a note of your sources of income and keeping track of how they develop between now and the future, you should be in a good place to create the rest of your retirement plan. Whilst reviewing your sources of income, remember about inflation – the cost of items today won’t be the same in the future. You should also factor in everyday expenses as well as having money set aside to have fun.

3. Thinking about your retirement timeline

You should now have an idea of the retirement lifestyle you’d like to live and the income you’ll have to support you. It’s at this point that you can begin to produce the primary output of your retirement plan.

Starting from the beginning of your timeline, you can begin to plot how your retirement income will be spent over the course of your post-career years. As you go through it all, you can budget for each of the activities, goals and events you’ll experience, allowing you to paint a clearer picture of what your financial situation, and spending habits, are likely to be. With this information, you could feel empowered to make informed decisions around your adventures and their associated costs.

4. Setting out clear goals, events and milestones

Now that you’ve plotted a timeline of your retirement activities and ideal spending pattern, you’ll be able to better visualise what your later years will look like and plan for how you can fund it all, as you work your way towards retirement.

Similar to your retirement journey, create a timeline from where you are now to your target retirement date. Think about how you’re going to save towards the retirement lifestyle you’ve outlined. You could consider setting yourself saving targets to achieve your retirement income target. For example, you might wish to have saved a certain amount in 5 years’ time and then set yourself a new target for another 5 years’ time.  

You also need to think about different situations you could encounter. As we grow older, there may be times of ill-health that require costly care or you may have debt you need to cover. It’s just as vital to include these milestones in your timeline, to anticipate any difficult financial, and personal, decisions which may need to be made by you or your loved ones. Financial wellbeing is about making sure you’re prepared as much as possible– and retirement plans can help you to do that.

It’s also important to consider the goals you would like to achieve in the time leading up to your retirement rather than purely focusing on your future – particularly in terms of your financial goals, lifestyle targets and desired social impact. This should help you improve your overall financial wellbeing.

5. Revisiting and adapting your plan

A key point to remember is that it might take more than one attempt to build a retirement plan that you’re happy with. Make a point to review your plan at least once a year and make any necessary changes. We all have different approaches to spending, personalised goals and aspirations – and personal circumstances that may require specific attention, as life continuously shifts in unexpected ways. Keep adapting your retirement plan until you feel happy and secure in the knowledge that your finances will enable you to have an enjoyable present and future.

6. Making a plan that works for you

To round it off, here are a few helpful ideas that could make your retirement plan even more effective over the long term:

  • Have both physical and digital versions of your plan. Being able to tangibly hold your plan could encourage you to keep coming back to it and make any necessary adjustments as you go.
  • Don’t be afraid to speak with other people about your retirement plan. Your partner, friends and parents could all provide valuable support and knowledge that helps you to create the best plan possible.
  • Present your plan in a manner that will help you to remember it. Colour, image and unique layouts could help your goals and plans to stick in your mind when making decisions.

Safety and happiness in planning

Retirement plans don’t have to be scary documents that govern your life, but they’re an incredibly helpful way of envisioning your future and could help you overcome any financial hurdles or worries which get in the way of making it a reality. If after reading these tips you’d like some more support, we’d recommend accessing professional financial advice. An adviser can act as your financial coach, providing tailored advice based on your own personal situation and needs. There’s likely to be a charge for this service, if you don’t already have a financial adviser, you can find one by visiting MoneyHelper.

Next up

If you’re approaching retirement, read our How to plan for retirement - a step by step guide article and for other financial wellbeing tips, you can read our Financial wellbeing index.

  1. How you can improve your financial wellbeing, page 43. Data source, Financial wellbeing research conducted by Aegon’s Centre for Behavioural Research, August and September 2021. Conducted with 10,021 UK residents.


Insights Retirement and pensions