Retirement investment planning at different life stages

Planning for your retirement is a multi-decade project. While it can be tempting to assume that you will always have time to deal with it, the earlier you start investing for later life, the easier it will be. We walk you through the decisions you need to make to build wealth in retirement at each stage of your life.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Investing for retirement in your 20s

Retirement will seem a long way off at this point, but you can probably make a greater difference to your retirement wealth in your twenties than at any other point. Every pound you can save today could have thirty or forty years to grow. That is a powerful headstart to your retirement income planning.

The sums are impressive. £1,000 saved in a pension at 25, growing at 5% a year,¹ could be worth £7,360 at age 65. The same £1,000 invested at 50 would only be worth £2,110.² Every contribution you make is topped up by the government and, potentially, by your employer.

It may feel difficult to set money aside when you have other commitments such as student loans and rental payments, but contributions at this age are really valuable. In particular, opting out of your company scheme means leaving contributions on the table and may be a false economy.

Another important consideration in your twenties is how your money is invested for retirement. With a multi-decade time line, you have the flexibility to take more risk. You have time to navigate the volatility associated with stock market investment. It also becomes more important to ensure that your money keeps pace with inflation, or you risk losing purchasing power in real terms. While it sounds counterintuitive, taking too little risk at this stage can be hazardous.

How to invest for retirement in your 30s

In your thirties, life can often get in the way of pension savings. There may be increasing calls on your financial resources: weddings, children, house purchases. As with your twenties, every little you can save now really counts in the long-term. You still have plenty of time to ride out market volatility and beating inflation should remain a priority.

If you have a workplace pension, you should look at what it holds within it. Often, you will be placed in the default fund, and there may be better options to invest for retirement for your age and stage. You could also consider starting a personal pension plan, such as a SIPP (self-invested personal pension). SIPPs are easy to open and manage on the major investment platforms. ISAs may also be a useful tool in saving for retirement. It is important that your long-term savings are in a tax-efficient environment. This can help compound their growth over time.

Your thirties are also a time where career paths can be disrupted: taking time out to care for children can see pension contributions stop altogether. If you can, continuing to make contributions for whoever takes time out of their career can be important in the long-term. If you don’t have earnings, you can make contributions of up to £3,600 (gross) or £2,880 (net).³

It can also be a crucial decade in ensuring you have access to the full state pension. You need 35 qualifying years to be entitled to the state pension in full (currently £230.25 per week for April 2026/27).⁴ While many parents qualify for National Insurance credits through child allowance, this may not be true for those married to higher earners. You can make voluntary National Insurance contributions to fill gaps in your record.

How to plan for retirement in your 40s

Your 40s will often be your peak earning stage, but also your peak expenditure. You may be juggling mortgage costs, education fees, or even helping ageing parents. You need to harness all the resources available to you to ensure your retirement planning remains on track. As a rule of thumb, advisers suggest you should have 3-4x your annual salary saved in a pension by the end of your 40s.⁵

You may have had several employers, been through periods of self-employment, or even started business ventures. This can leave your pension planning looking messy. You may have several pots, all in different investments. Your 40s are a good time to take stock of what you have and decide whether you need to adjust your planning or consolidate your pensions in one or two providers.

You have three levers you can pull to improve your long-term outlook. The first is to increase your contributions. You may want to do this through a personal pension that sits alongside any workplace pension. The second is to increase the risk level in your investments. You still have 20 years until you retire and you need to check if excessive caution is holding back your returns. Your final lever is time – you can defer the point at which you retire and make contributions for longer.

How to plan for retirement in your 50s

Retirement becomes a realistic possibility for some people in their 50s. While you will have to wait until your sixties for your State pension, you can take money out of your personal or workplace pension at 55 (57 from 2028).⁶ If you plan to take early retirement before then, you will need to call on other resources. For example, you can use ISAs for retirement planning. All income generated from investments held within an ISA is tax free, so they can be a useful tool to create a long-term income stream.

How much you need to retire very much depends on how you want to live in retirement, alongside other variables such as whether you have paid off your mortgage. The Retirement Living Standards survey found that a single person would need £43,900 to live comfortably in retirement.⁷ Excluding the state pension of £11,973 per year, an individual may need to save enough to generate an income of £31,927 per year.

Nevertheless, retirement may still seem like a remote prospect for many people in their fifties. The good news is many people will find that their expenses drop at this stage and they have more money to set aside for retirement. Children may be leaving home, mortgages may be paid off, while salaries are still high. While the effects of compounding are not as significant as earlier in life, you still have 10-15 years for your savings to grow.

How to plan for retirement in your 60s

Your sixties are the time to get serious about your retirement planning. This can be a moment to engage a financial adviser to help you plan the last few stages before retirement. There will be a lot of decisions, including whether you want to retain some paid work, or are retiring in full. Every decision you make on when and how you retire will have an impact on the amount of money you need.

There will be some investment considerations. For example, you may want to start to shift into lower risk or higher income assets in preparation for having to create an income with your investments or buy an annuity. Doing this gradually avoids significant market risk. You will still need some protection against inflation, but minimising volatility is important.

You should also be prepared for the emotional impact of retirement. It is a major life event and some people can struggle with the transition. The loss of a social network, for example, can be difficult and people also have to adjust to a change in identity and purpose. Having security around your long-term finances is an important part of having a happy, productive retirement.

¹ MSCI - MSCI World - 28 February 2026
² This is money - Lump sum savings calculator - 19 March 2026
³ Gov.uk - Pension scheme rates - 19 March 2026
⁴ Gov.uk - State pension: what you’ll get - 19 March 2026
⁵ PensionBee - Retirement planning in your forties - 6 April 2025
⁶ Gov.uk - How you can take your pension - 19 March 2026
⁷ Pensions UK - Retirement Living Standards - 3 June 2025

Risk Warnings

Investors should refer to the prospectus or offering documentation for the funds full list of risks.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Levels and basis of taxation may change from time to time and depend on personal individual circumstances.