Many people feel they’re falling behind when it comes to affording their retirement, and the truth is, most are. But here’s the crucial caveat: it’s never too late to change if you’re willing to take action.
If you’re ready to take control of your finances and make your retirement not just possible, but a mathematical certainty, here’s your roadmap.
1. Calculate Your Retirement Number
Your retirement number is simple: annual expenses × 25.
Start by creating a household budget. Review your bank statements and document exactly how much you spend each month, then multiply by 12. This reveals your current annual expenditure.
Next, ruthlessly reduce your spending to the minimum. Go through your budget line by line, categorising each expense as either essential or discretionary. Be completely ruthless with discretionary spending—cut it down aggressively.
2. Increase Your Income Strategically
For most people, earning more money sounds unachievable. It isn’t. Here are your options:
- Start a side hustle alongside your main job
- Change jobs if it means higher pay
- Make yourself indispensable at your current workplace—so valuable that it would be embarrassing for them not to pay you more
If your current employer won’t reward your increased value, find another job elsewhere.
3. Eliminate Debt as Quickly as Possible
Debt takes you further from your goals, not closer to them. Whilst there’s some debate around mortgages being “good debt,” focus immediately on clearing:
- Unsecured loans
- Credit cards
- Store cards
- Any other high-interest debt
Pay these off as quickly as possible. They’re financial anchors holding you back.
4. Maximise Your Pension Contributions
This is the cheapest money you’ll ever invest, thanks to tax relief and employer matching.
Yes, life is expensive right now. When you see money coming off your payslip for your pension, you might wonder where it’s really going. If you’re 20, you won’t see it for 37 years. If you’re 30, that’s 27 years away.
But I promise you this: the day you retire, you’ll wish you had more in your pension pot.
5. Embrace Risk for Reward
Many people put money into cash ISAs or savings accounts, earning 2-3% interest. Building wealth becomes significantly harder at these low rates compared to investing.
I invest in equity-based index funds, which have generally returned between 7-10% on average over my investing lifetime. Remember: past performance doesn’t guarantee future results, so do your research. But typically, you’ll see better returns from investing than saving.
Property investment is another option worth considering.
6. Front-Load Your Investments
The earlier you start investing, the more time your money has to compound and grow.
In your 20s, you might think you don’t need to worry about your future—you do. In your 30s, time starts feeling more pressing. At 40 and above, retirement planning becomes a constant consideration.
The best time to start investing was yesterday. The second-best time is today.
7. Change Your Relationship with Investing
Begin to love investing the way you currently love spending money. This mindset shift was transformational for me.
Every month, when I invested money, I’d think: “Brilliant—I’m buying back my future.” Because that’s exactly what I was doing. Each investment brought forward the date when work became optional rather than necessary.
8. Utilise Your ISA Allowance Properly
You must invest in an ISA, but not a cash ISA. Use a stocks and shares ISA because every penny should be working for you, not sitting idle.
Think of it this way:
- Pensions are for when you can officially retire
- ISAs bridge the gap between when you want to retire and when you can access your pension
9. Focus Relentlessly on Financial Education
The quicker your finances work for you, the better your outcomes. The more you understand about money management, investing principles, compound interest, and income generation, the easier it becomes to achieve your goals.
10. Accept the Reality of Sacrifice
None of this will be easy. There will be sacrifices, especially if you’re in your 40s with families, cars, mortgages, and other life costs. I completely respect these realities.
But if you make these sacrifices now, you won’t have to make them later in life. The temporary discomfort of disciplined financial behaviour pays dividends in long-term freedom.
Remember: When you know your numbers and put consistent effort into achieving them, you’re setting yourself up for future financial success. Retirement in 10 years or less isn’t just a dream. It can be a mathematical certainty if you’re willing to take action.
