When do I need to start saving for retirement?

Both million-dollar questions, but ones that many of us don’t seriously consider until we reach middle age. However, the good news is that by spreading your saving over decades – and yes, starting early – you’re much more likely to achieve a great retirement. Too many of us still think that we’re either too old, or too young, to start saving for retirement.

Great retirements require long-term practical planning. In this article, we break retirement saving down, decade-by-decade.

“How much money will I need?”

Let’s tackle the first question – “How much money will I need?” A good rule of thumb is to have a pension pot worth about ten times your annual salary by the time you retire. But a financial adviser can help you finesse this figure and create a personalised plan. That way, you know what you’ll need to spend your money on in retirement, and what you’ll want to spend your money on to enjoy life. Their advice can help make sure you capture everything – plus factor in inflation and potential medical or social care costs in the future.

The sum may surprise you. But, like every big challenge, it's about breaking it down into simple, actionable steps.

What you should be saving in your 20s

You should aim to have saved the equivalent of a year’s salary by age 30. That might be personal savings, but it also might be in a national or workplace pension. Depending on where you live, you’re likely to be automatically enrolled in a pension scheme. With so many other financial priorities, it can be tempting to pause contributions, especially if you are self-employed. But staying enrolled is often one of the simplest and most effective ways to build long-term financial security. Many governments offer tax incentives to encourage saving, and employers may contribute too. Free money – what’s not to like?

Starting pension contributions in your mid-thirties, when your earning power is starting to climb, may literally translate into money in the bank. And you will have more years to benefit from that magic ingredient: compounding.

What you should be saving in your 30s

By the end of your 30s, you should aim to have retirement savings equal to three times your annual salary. At this time of life, with so many demands on your salary such as a mortgage, or young family, you may be tempted to pause your pension contributions altogether. Retirement seems a very long way off. But, if you have the discipline to stick with your long-term savings plan, those ‘little and often’ affordable contributions will be slowly buying you a dream retirement. And it’s OK to start small if you need to and gradually build up your retirement savings over time. Affordable means sustainable.

Increasing your contributions year on year in line with inflation, or a wage rise, is a tax-smart plan too.

What you should be saving in your 40s

Your savings goal should equate to six times your annual salary by the time you turn 50. Earnings often peak in this decade, so make the most of your ‘fabulous forties,’ and put a little extra in your pension if you get a great bonus or wage rise. You’ll be making even bigger strides towards your retirement target.

Financial advice can help you potentially double your pension pot every decade, despite the ups and downs of financial markets. This is why a pension fund is a great way to save and invest.

What you should be saving in your 50s

By the time you turn 60, the end of your working life may be in sight. By this age, you should aim to have saved the equivalent of eight to ten times your annual salary. Now is the time to make more specific plans. How much will you need to retire? Do you either want to, or need to work a bit longer, so you can save some more? Not everyone wants a ‘hard stop’ at 65. Can you afford that holiday of a lifetime? When you’re calculating your retirement income, don’t forget the pension pot we talked about earlier. You can check whether you’re on track to your goal, or if you need to make some additional payments to put more money aside.

Is it too late to start saving for my retirement at 60?

It’s never too late to start saving—though the earlier you begin, the more time your money has to grow. Even in your 60s, there may still be tax benefits available when you contribute to retirement savings, depending on your local regulations. A financial adviser can help you explore the most suitable options for your circumstances, especially if you’re working with a shorter timeframe. That could include a mix of retirement accounts, personal investments, or other financial tools tailored to your goals. 

Diversifying your savings can also give you more flexibility and control. For example, you might use one source to fund travel or lifestyle plans, while another supports your everyday living costs.

Your 50s and 60s – getting match-fit for retirement

Building up your assets for retirement is only half the story. It’s having a financial plan that will help you get ahead of the game. If you’re actually planning your last day in the office, now’s the time to start thinking about how you want to draw the income you’ve saved. This is a key part of your retirement income plan, so get some financial advice to help you draw your pension, or your savings, in the most sustainable, tax-efficient way.

Start planning by decade and you won’t be leaving your dream retirement to chance. Get in touch with us today, and let’s get the retirement party started!

This article is a general communication being provided for informational purpose only. It should not be relied upon as financial advice and it does not constitute a recommendation, an offer or solicitation. No responsibility can be accepted for any loss arising from action taken or refrained from based on this publication. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.

This material has not been reviewed by the Monetary Authority of Singapore.

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