When do you want to retire?
The first step to formulating a retirement plan is of course working out exactly when you wish to retire. You will then know how many years you have to plan ahead and about how much money you will have saved by that time. It is never too early to plan for retirement. Almost everyone who retires wishes they had started saving and planning for retirement much earlier. If they had started in their 20s, they would be more confident about considering early retirement.

Can you afford to retire?
Once you know how long you have until retirement, figure out how much money you need to live comfortably. Estimate the income you expected to receive from social security, other pensions, savings, and investments. If your income falls short of your needs, you will have to adjust your goals or retirement timetable.

You need to be realistic and plan your goals in line with the money you will have. Unless you get an unexpected windfall such as a lottery win, you should have a good idea of how much money you need for the rest of your life.

Estimate what you will need for housing, food, health care, insurance, entertainment, travel, gifts, etc. Do not under-estimate insurance and health care expenses.

Do you need to save more for retirement?
Then consider the following strategies:

• Save regularly: This is an obvious point but one that can be forgotten or looked over. Saving just 10% of your weekly income can add up to hundreds of thousands of dollars by the time you retire. Pay yourself first. Sock away a least a portion of any salary increases.
• Get a promotion: Make a formal application for a promotion at work by noting down all your attributes and achievements. If you have been at the same job for many years, then it may only take one request for you to be granted a promotion and pay rise. But be smart about your timing. If your company is struggling, don’t ask for more money. Instead think of ways to help your company prosper so that it will be able to keep you employed.
• Get a second job: A second job may sound like hard work, but it can bring in much needed extra money that can be enjoyed when you retire. A second job only needs to be a few hours a week, but if the money is saved in a high interest account then the difference can be substantial.
• Start a small business: When you run your own business, even if it’s a micro-business, you are in control of your time, expenses, and, to some extent, profits. A small business can ease the transition from full employment to retirement. Running your own business can be an exciting challenge at any time in life.
• Invest more: Certain investments can grow your money faster than saving it in the bank. If you can afford it, consider property, stocks or other investments that you can hold until you retire. These should be treated as long-term investments, and be funded by money you don’t need in the near future.

Most people will need to use a combination of strategies to achieve their retirement goals.