It’s never too early to think about retirement, says financial columnist Peter Sharkey.

The number of my friends and relatives who have either retired or announced plans to do so appears to have risen exponentially over the past 12 months.

Nowadays, lunchtime texts to pals suggesting a quick, after-work beer are likely to receive replies along the lines of: "Sorry, no. We're in Spain", or "Can't do Monday - we're off to the States".

Even a call to my own brother, during which I recommended meeting at a local pub to celebrate his forthcoming birthday, was met with an unusually prolonged silence. "I told you we were going away," he declared, mildly exasperated at my memory loss, "so let's do it when we get back." I have a vague recollection that he did tell me this, but you know how brothers can be...

All the same, either I've become the archetypal Billy No-Mates or the trend for Baby Boomers to turn their back to the grindstone and wind-down is gathering pace.

The early part of retirement is considered a golden period when people expect to enjoy the luxury of uninterrupted holidays, pursuing hobbies or entertaining friends and family, assuming they're not swanning off to Asia for three weeks, of course.

Granted, many retirees would say this picture is significantly rosier than real life. Yet for future generations, the gap between this idyllic scenario and reality is likely to be considerably wider, especially if the only source of post-retirement income is the state pension.

Millions of people do rely solely upon the state pension, forced to endure a frugal retirement devoid of luxuries and short breaks overseas. Despite this, a worryingly large number of younger folks are often complacent about saving for old age.

Yet they are the group best placed to build up large nest eggs by the end of their working lives thanks to one extremely valuable asset: time.

They should make the most of it because there's a very good chance that the age at which people become eligible to receive the state pension will continue to rise. Several reports have suggested that the age threshold should rise to 69 by 2039, while a document prepared for the pensions department suggested that anyone aged under 30 will have to wait until well beyond their 70th birthday before receiving a state pension.

Moreover, this assumes there'll be anything left in the state pension pot by then. According to a document published by the government's actuaries last year, the National Insurance fund, from which pensions are drawn, will run dry by 2033 unless taxes rise or huge sums of money are poured into the pot on a regular basis.

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Even if we assume a combination of both, the state pension is far from a King's ransom. At present, females born after 6 April 1953 and males born after 6 April 1951 receive £168.60 a week; the exact figure depends upon the level of National Insurance Contributions (NIC) made during your working life. To receive a full pension, a minimum of 35 years' NIC is required.

It's estimated that there are more than 8.7 million households with at least one person of state pension age, with around 1.4 million of these solely reliant upon the state pension.

Though many younger people dismiss pensions as dull, they need to ask themselves how much fun they could have during a retirement when money is tight.

It follows that there's great merit in viewing the state pension as a retirement start point, used to cover basic expenditure. In order to do those things earmarked for retirement, however, most people will need to supplement this by drawing upon their own savings - from a private pension or an ISA.

Deciding how much to save depends upon the kind of lifestyle you want to enjoy, your current age, when you start saving and your present earnings.

As a rule of thumb, people should aim to save around 12-13% of their gross salary into a retirement pot, a figure which includes their own and their employer's contribution. It's worth noting that since 6 April 2019, total workplace pension contributions equate to 8% of gross salary, which leaves a shortfall of between 4-5%.

Climbing on to the long term savings ladder at an early age will have enormous benefits by the time you retire. You might, however, feel bad when a mate's text suggests an after-work drink and you advise him or her that while you'd love to, you're away right now and back in a few weeks…

TAM Asset Management Ltd offer savers the opportunity to invest for their retirement in a variety of Investment ISA portfolios and through other investment accounts. For further details, please visit the MoneyMapp website.

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