If you have just started working and earning money, your parents telling you to save for your retirement will sound ridiculous. After all you are young and you have the rest of your life to save money for retirement; that's what you think. But listen to your parents; planning your retirement is not a waste of time. It is in fact the best way to utilize your time and save your money. Most people will brush off this 'save early' mantra, but those who are smart will recognize the need to do some pre-retirement planning.

The concept of pre-retirement planning is easy.

You save money now because you won't be earning money later. Most people do not understand the urgency of pre-retirement planning. These are the same people who will be seen later in life living in a small low rent apartments and working at odd jobs to support themselves. Living this hard life when you are a senior is not pleasant. Avoid this situation by just saving a little now and living comfortably later.

1. Start of your pre-retirement planning by actually formulating a plan.

Sit down with a pen and paper and note down important details. Start with some financial information; the most important being medical needs. When you are old, you will need medical aid and this is expensive. You will need to save money to support your medical expenses. But how much medical aid will you need and how much it would cost you are difficult to assess. Get in touch with a financial planner who will work out some average cost of health care that will help you determine how much you need to save.

2. Another aspect of pre-retirement planning is your living cost.

This can be determined by figuring out your standard and cost of living. Do you want to continue living in the same big house as now? Remember as you grow old, maintaining a large house and its expenses become cumbersome. You can either choose to live in a smaller house or live in an apartment in one of the many retirement villages that are springing up. These retirement villages are ideal for people who need some help as they grow older. Some people would also like to live in a mobile home; this is perfect for those who were too busy working to travel. Once you have retired you can do all the traveling you want. These decisions will help you understand how much you need to save and what kind of finances you need to maintain for your pre-retirement planning.

3. Pre-retirement planning requires dedication and responsibility towards your finances.

The best way to start off your plan is to write out the plan and formulate a budget. The next important step after making the plan is to adhere by it. Start by putting small amounts of money every month in long-term savings funds. Get in touch with financial planners who will guide you in the best way and make sure your money and investments grow with you. Save small sums of money. Most of the younger generation prefers to spend their money on things they want like cars, clothes and country clubs. But you will only know the importance of this move when you are old and retired.