When Should You Start Saving for your Pension?
“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett
Don’t Put Off Until Tomorrow What You Can Do Today
Even if you love your job, you must retire eventually. This is when you can sit back and enjoy the benefits you’ve reaped from all your hard work and efforts. However, when people reach this point in their life, they must face a substantial amount of income reduction. This can bring about unwanted changes to your lifestyle. While most of us would like a comfortable retirement, the process of planning for our pension can seem disconcerting but it doesn’t have to be. All it takes is a little investment and long term commitment.
How Should You Prioritise Your Savings?
First prioritise, without a doubt, the basic life necessities and responsibilities you have. After these have been deducted you are left with the remainder of your savings. This is when you should ask yourself in advance “Is this enough for me to get by comfortably and still enjoy the same, if not a better, standard of living?” bearing in mind unforeseen and possible financial expenses.
Why Can’t I Just Rely on the State Pension?
Government funded pension schemes are less likely to sustain the income needs post retirement. The pension that one may receive from these schemes will not likely be sufficient to maintain the lifestyle you’re used to. Granted, it is a steady income but why not strive for a bit more and live your retirement days with peace of mind whilst also retaining your own financial independence.
So When Should You Start Saving for a Pension?
As soon as you have a steady income. The sooner you start your pension planning, the longer it has to potentially grow, which could make a big difference to your retirement fund. Give yourself peace of mind knowing you’ve invested in your future, leaving you to enjoy the present moments of life. Start early enough and you can have a sizable amount by the time you’re ready to retire. You’re only holding yourself back the longer you think about it.
How Do You Actually Save for a Pension?
You put aside a percentage of your salary in monthly fees during your working life into a pension fund. When you reach retirement age, you can access the money in your pension pot with, up to, 30% tax free lump sum. There are also tax rebate benefits involved as an added incentive. Think of it as planting a seed and watering it throughout the years so you can enjoy the fruit in later years. Should your circumstance change, you can change the amount or take a break altogether, giving you control and flexibility.
Contact us for more information so that you can understand what an impact a private pension plan may have on your future.
written by Keith Laferla
Assistant General Manager