When should I start saving for retirement?

The answer is simple, as soon as you can. Ideally, you should start saving in your 20s, when you first leave school and begin earning income. That's because the sooner you begin saving, the more time your money has to grow. Each year's gains can generate their own gains the next year - a powerful wealth-building phenomenon known as compounding.

How much should I save?

"As much as you can" is the standard advice. Many financial planners recommend that you save 10% to 15% of your income for retirement, starting in your 20s.

But that's just a general guideline. This is your retirement we're talking about, so it pays to get a little more specific by doing your homework up front. It's a good idea to establish a savings target - one that tells you roughly how much you should set aside over time to meet your retirement goals.

What if I can't save enough?

Try to divert as much of your earnings into savings as you can. If you don't have a budget, create one. If you do have a budget, revise it to reflect your newly urgent commitment to saving, as well as any changes in your spending since your last outbreak of budget fever. Chip away at wasteful habits - that might mean ditching expensive dinners or unused gym memberships.

If you're still young and you can't save enough right now, don't be discouraged. Your income will probably grow as you progress in your career, allowing you to save more. You might also have other opportunities to boost your savings rate; for example, a bonus or inheritance can make a big difference in your long-term prospects if you invest some of the money in retirement accounts.

When can I retire?

Trying to figure out whether you can afford to retire is like putting together pieces of a financial jigsaw puzzle. First, you need to estimate how much you'll spend in retirement. Then you must consider the income you'll collect in retirement from pensions and National Insurance, as well as the amount you can afford to draw from your personal savings or other sources.

The idea is to assemble the various pieces, and then see whether the picture of retirement life that emerges is acceptable to you.

As always, your CLICO agent can help you determine you retirement goals by reviewing your present financial plan and priorities for the future. Call or visit us at any of our conveniently located Branch Offices.