Although retirement may seem a long way ahead for some, and a lot closer for others, maintaining the lifestyle that we are used to and living comfortably is certainly a common aspiration which, however, we sometimes do not really give importance to.

Many people work for a huge part of their lives. As such, it is normal to aspire to maintain a certain lifestyle during retirement and, why not, to do those things you always wanted to do but did not have the time to experience!

Maintaining your lifestyle when you retire could mean many different things to different people. Some examples that come to mind are:

• Vacation: We all have that special holiday that we have been longing to go on but never had the time for due to work commitments.  Your retirement is the best excuse to enjoy your newly freed-up time to explore places that you have never been to.

• Family Time: Juggling between work and family commitments is hard but retirement gives you the time you need to dedicate to your family.  Now is a great time to plan family lunches or get-togethers and start spending time with your grandchildren during the week whilst their parents are at work.

• Doing Absolutely Nothing: It may seem strange at first to wake up on a Monday morning and realise you do not have to go to work anymore. Usually, retirees do not have to get up early or report anywhere at a specific time so you will be free to linger over a second cup of coffee and take your time running errands.  It is time to take things easy and tend to your own needs. You have earned it after all!

• Hobbies: Retirement is the perfect time to get to learn new things and pick up those hobbies that you had abandoned throughout your work life.  There are various sports activities which will keep you active and fit. You may also want to consider being a volunteer for a cause you are passionate about which can be greatly rewarding.

These are only a few of the exciting activities that one may pursue in retirement and everyone would have different plans and projects. In all these different circumstances, there is one common aspect that has to be addressed by everyone, irrespective of your plans and aspirations for when you retire. This is the financial aspect, that is, answering the question - How much money will you actually need to retire and maintain the lifestyle you aspire to?

It is good to keep in mind that although one might have fewer expenses relating to bringing up your children and borrowings, there would be new expenses that are related to older age, amongst others, that make it imperative for one to plan ahead in order to be able to retire comfortably. Furthermore, if you would like to enjoy a more relaxed lifestyle, visiting your favourite restaurants, practicing your favourite sports and hobbies and even travelling abroad more frequently, then it becomes even more important to plan ahead. 

One has to keep in mind that the First Pillar State Pension might not be sufficient to achieve such financial freedom at retirement particularly considering the lifestyles we are accustomed to today.  This means that you urgently need to start saving for the gap in income that you will experience when you retire! 

The actual amount that needs to be saved also depends on your age and your desired retirement age.  If you retire later, you will have fewer years of spending at retirement.  The national retirement age is currently set at 65 for those born after 1961.  However, you can also voluntarily postpone your retirement by opting to work for a longer period of time.

One way of saving for retirement is through a personal retirement plan.  This involves contributing a small amount of money regularly, from €40 a month, to build up a savings pot for your retirement.  By saving through a qualifying retirement scheme, you can also benefit from tax credits on contributions made towards your pension plan.  This year anyone contributing to a qualifying retirement scheme can receive up to €500 as tax credits in the following year, depending on the contributions made.  Of course, tax treatment depends on the individual circumstances. Tax legislation and the amount of rebate may change in future.

MAPFRE MSV Life offers Pension Plans designed to offer you flexibility and investment choice. For more information about how you can plan your retirement, you can refer to the MAPFRE MSV Life free online Retirement Planning Tool at www.msvlife.com/myfuture.  We strongly advise that you read the product Information Leaflet and the Key Features Document which are also available on our website.  You can also visit one of our Regional Offices in Floriana, Birkirkara or Luqa, or contact one of our intermediaries for more information or to set up an appointment.

MAPFRE MSV Life p.l.c. (C-15722) is authorised under the Insurance Business Act, Cap 403 of the Laws of Malta and regulated by the Malta Financial Services.