I always find when speaking to clients and prospective clients that we can easily get bogged down in figures; how much you need to save for your retirement, how much you have now and then how to fill the gaps.  In reality all these figures mean very little to most people, and although they are a good foundation from which to start, it is difficult to translate them into factual information. After all, retirement might be some way down the line for many people. Thinking about what you are going to do when you eventually have the chance to stop working might seem like more of a dream than a reality.
The sad truth is that only about 5% of people are on track to be fully financially independent in retirement. The other 95% think they’re safe, but on closer investigation are far from it.
With this in mind, I would like to share a working example with you to try and bring some reality to the subject of planning for your own comfortable retirement of warm slippers by the fire in winter and the sun of the holiday home in the summer. This example is my mother, and I hate to say that it is a story of what can happen if things don’t work out exactly as you had hoped.
Firstly I should share the fact that my mother and father were married for 21 years and then divorced. It’s not unusual in this day and age.  However, my mum was a housewife and only began taking on part time work as my sister and I became more independent in our teenage years. This meant that she had accrued some UK basic state pension contributory service but not for the years she had taken off work to care for us. Neither, had she saved any money for retirement.    My mother retained the house in the separation package (with mortgage), and some savings, but these were needed to support her lifestyle as she had to move from part time to full time work.  
Fast forward to today and she is now 61 years old and still in full time work while receiving a full basic state pension.  The basic state pension was her saviour.
During her work years she managed to start making savings into a personal pension plan, with herself and two children to support, she was not able to contribute much. When she took her annuity last year, it was from a pension fund of £25000. She was able to receive an annual income of just £1000.  This is NOT inflation linked.  If it had been it would have  been significantly less.
My mum was also unfortunate in one sense, but lucky in another.  She received some inheritance from her mother. My grandmother was not a wealthy lady and left my mother with approximately £45000. As my sister and I became fully financially independent and my mum finished paying off the mortgage on the house, she redirected the mortgage payments into this investment to build her savings alongside her pension plan.  

Unlucky for some

Little was she to know that the friend and financial adviser who set up this investment for her was not the most ethical of individuals, and advised her to take out a product that was not suitable for her financial needs.  In addition, my mum had stipulated that she was a cautious investor and was placed into technology funds at the height of the technology boom in 1999.  As you may know, this particular period ended in spectacular disaster. She lost half of the little savings that she already had as their value dropped to £23000.  

Enter stage left: The SON

As I had recently trained as a financial adviser with a small insurance company in the UK, my mother asked if I would step in to rectify the situation. I am not in the habit of advising family as it sometimes ends in arguments, but I could not turn my back on my mum and didn’t want the same to happen again.
I explained to her that if she wanted to meet her long-term retirement objectives and have a reasonable amount of income that she could live off, she would have to increase and improve her current savings/investments. I presented it clearly:  to get back to the original level and build she was going to have to take investment risks.  Otherwise it would be a slow building process back to her original capital and she may never get there.  Left with little choice, she took my advice and handed over control of her portfolio to me.  
Through some restructure of the underlying portfolio, some strategic asset allocation, hard savings from my mother and a lot of patience, she is now sitting on a portfolio worth close to £100,000.  I expect that this could provide her with an income of £3500 to £4000 a year without eating into the underlying capital.
If you consider that she is now taking a full UK basic state pension of £102.15 a week, plus an expected income of £4000 from her portfolio and an annuity payment of £1000 p.a. then her total annual income is in the region £10300 per annum.  Whilst her house is paid off and she has few outgoings, she would like to travel more to Italy to see her one-year-old grandson and also to Kosovo to see her daughter.  The problem is it all costs money. Where can she take it from?
The point I am trying to make is that this is a perfect example of life’s uncertainties. My mum is faced with the question of whether she needs to continue working when she is at a time in life at which she would prefer to spend more time with her family.  The decision is not easy to make because she does not have the financial capacity to step back and make those choices freely.
I meet lots of people around Italy in the course of my work, both clients and potential clients, and I see the same thing over and over again. People are too reliant on government support, do not save enough and have no clear financial plan about how they are going to become financially secure in the future.  
Everyone should be saving more. I understand that we all have periods of high expenses in our lives when it is difficult to save; we might even have to stop savings for a short time.  But we MUST return to a mentality of saving for our futures. Government support is minimal and declining fast and personal savings/employer pensions must take up the strain.  You can no longer rely on anyone but yourself in old age.
As my grandmother used to say, save a bit and spend a bit and you will be OK. Sound advice for every age.