Retirement is a phase we all look forward to. Lie-ins, holidays, the flexibility to do what we want when we want. But how do we ensure we're financially ready for it?

Many of us diligently pay into a pension each month and yet a common question lingers: “Am I saving/will it be enough?” This blog post aims to get you thinking about what factors you might want to consider when trying to answer that question.

1. Envision Your Retirement

Before diving into numbers, take a moment to picture your retirement. Where do you see yourself?

Maybe you're living in your current home, maybe you’ll want to downsize, or perhaps you're thinking of moving abroad. Consider if you'll be living with family or a partner. Will they have savings or a source of income too?

Understanding how your future lifestyle is likely to look will help you better plan your financial future.

And here's some good news too: pensions can be received anywhere globally, though it's subject to tax. So, if you dream of travelling or emigrating, there's nothing holding you back!

2. The Bucket Budgeting Approach

Next, set yourself a budget. Think of it as three buckets:

• Basic Survival: This covers your essentials. Think food, clothes and bills.
• Home Comforts: These are things that add comfort to your life. Saturday night takeaways, TV shows, or nights out with friends fall into this category.
• Little Luxuries: These are the treats. Holidays, gifts for loved ones, or maybe a new gadget you've had your eye on.

Start by filling in the 'Basic Survival' bucket. Once that's sorted, move to 'Home Comforts', and then to 'Little Luxuries'. This method can help build a clear picture of where your savings stand.

3. Don't Forget Inflation

Remember when things used to be cheaper? Prices rise over time. It’s what’s known as Inflation. When planning for the future, it's important to factor in these rising costs.

However, some pensions, like the Teachers' Pension Scheme, offer protection against inflation. Our pension is index-linked meaning it rises annually to match the rise in inflation.

So, while everything might cost a bit more in the future, our pension will have you covered.

Retirement planning doesn't have to be complicated. By envisioning your future, adopting a budget approach, and considering inflation, you can be well on your way to understanding if what you’re saving now is enough.

Remember, it's all about understanding your needs and planning accordingly.

As a member of the Teachers’ Pension Scheme don’t forget you can use our online calculators to help with your pension planning sums and by registering for My Pension Online you can use your own figures to plan!

It’s also a good idea to seek independent financial advice before you make any financial decisions.