A financial plan for retirement starts with this month
Most retirement planning fails at the first step: people try to choose an investment before they know what their life costs. This guide builds the plan the other way round — measure current spending, adjust for what changes, then work out the gap and the rate that closes it.
By Mouad Louhichi · Reviewed
Retirement is a spending question first
A retirement plan has three numbers: what you will spend each month, what income will exist without a salary, and the gap between them. Two of the three come from your budget, not from a fund brochure. The reason people stall on retirement planning is that they start at the third number and have no idea what the first one is.
So the first deliverable is not a portfolio. It is an honest monthly total for your current life, split into categories — because retirement does not cost a percentage of your salary, it costs a list of things.
Step 1: measure the baseline
- Collect three months of spending. One month is noise; three months shows the annual costs that land unevenly.
- Total it, then remove anything that will clearly stop — commuting, work clothes, professional subscriptions, childcare once children are grown.
- Add anything that will clearly start or grow — more time at home means higher heating, electricity and food-at-home costs, and health costs generally rise with age.
- Write the result down as a monthly number and keep the category list. That list is your retirement budget.
Step 2: what actually changes
Lower
- • Commuting and fuel
- • Work clothes
- • Lunches out
- • Childcare and school fees
Higher
- • Health and medication
- • Home utilities
- • Hobbies and travel
- • Help to family
Same
- • Housing charges
- • Food
- • Insurance
- • Debt that outlives the job
Step 3: the income you will actually have
Retirement income comes from whatever you have built: a state or social-security pension, an employer or sector scheme, voluntary savings and, often, property. The reason to list them separately is that each has a different risk and a different start date.
If you work in Morocco, part of your retirement income will come from CNSS, and many salaried workers also contribute to a complementary scheme such as CIMR. The amount depends entirely on your declared career record, so the useful action is to request your statement from the fund and check that every employer actually declared you. Unrecorded years are the single most common surprise, and they are far easier to fix while employers still exist.
- Request your pension statement once a year and check the years of contributions.
- Keep the paper trail for any period worked abroad — totalisation rules vary by country.
- Treat an expected inheritance or property sale as upside, never as the plan.
Step 4: the gap, and the rate that closes it
Subtract expected monthly income from the monthly spending baseline. If the result is positive, you have a shortfall, and the shortfall multiplied by twelve is the annual amount your savings have to produce eventually.
A common rule of thumb is that retirement spending lands at roughly 70 to 80 percent of pre-retirement income. It is a useful sanity check and a poor plan: your own category list beats any ratio, because it already contains your actual housing, health and family costs.
On the savings side, the useful discipline is to raise the rate once and then leave it alone. Raising it by one percentage point a year is sustainable; resolving to save 30 percent from next month is not. Retirement planning rewards the boring version.
- Write down the monthly shortfall.
- Multiply by 12 for the annual figure.
- Decide the savings rate you can hold for twelve months without drama.
- Automate the transfer on payday — this is the pay-yourself-first method.
- Review once a year, not once a month.
Frequently asked questions
How much money do I need to retire?
There is no universal figure, and any single number quoted without your spending is a guess. Start from your monthly spending after the costs that stop, subtract expected pension income, and the difference is what your savings must eventually cover. A withdrawal rule of thumb such as four percent is a rough way to turn that annual gap into a capital target — useful for planning, not a guarantee.
At what age should I start planning for retirement?
Earlier is cheaper, but starting late is still worth doing. The main advantage of starting early is not compound interest alone; it is that a small monthly commitment made at 25 is a habit you never have to negotiate with yourself again. Starting at 50 mainly changes the size of the monthly amount, not the method.
Should I clear debt or save for retirement first?
Clear expensive debt — credit cards and consumer credit — before increasing long-term savings, because the interest rate on that debt is almost certainly higher than any realistic return. Keep the employer-matched or compulsory contributions running meanwhile, and keep a small emergency buffer so a flat tyre does not become new debt.
How do I plan a retirement budget if my income is irregular?
Budget from your lowest recent month and treat the rest as surplus. For retirement specifically, that means calculating the shortfall on the conservative income figure, so the plan survives a bad year rather than only working in a good one.
Does SmartJib manage my investments?
No. SmartJib is a budget tracker: it records what you spend, what you save and what you hold, in twelve currencies. The retirement calculators model compound growth and Coast FIRE scenarios so you can see the arithmetic, but the product does not give investment advice or execute trades.
Educational content, not financial advice. Figures are worked examples; verify rates and rules with the official source. Editorial policy.