Retirement may not be the first thing on many people’s minds, especially with finding and keeping hold of a job so hard to do these days. Despite that, if you’re in work, it might be worth considering what your plans are for when you’re ready to give up your role and begin to enjoy your golden years.
Saving for your future is one of the smartest things you could possibly do. According to My Pension Expert, the sooner you start to save money for your retirement the better, as you’ll have more money to live on. Spokesman Scott said:
“With pension savings it really is the sooner the better. Although most young people have many financial commitments and lower wages early payments into a personal pension will pay dividends in the long run. Even if premiums are small to start it gets people used to making regular pension payments and attracts tax relief which means that in effect the tax man is making a small contribution too. The main benefit though comes from the time the money is invested. If a premium is made into a 20 year olds pension plan that money could be invested for over 45 years by the time they would look to take benefits. And as the old financial advice mantra go’s “it’s not just Timing the market it’s also Time in the Market!”
The world of annuities and pensions is undergoing constant change. Falling rates, changes to products such as variable rate annuities and wider threats to the global economy such as the potential for the fiscal cliff are making it harder for anyone wanting to save to work out when they should start.
Even in a climate as uncertain as now, it’s important to set aside a little money, even in just a competitive high interest savings account, to make sure that, once you turn 60 or 65 and find that you can’t cope with the daily grind, you have something to live on. You might wonder how much you have to save every week or month and how much you’ll need to have in order to be able to live comfortably.
Ideally, you should have an amount equivalent to three years’ wages – the average worker who saves that amount may have around $75-100,000 to live on for the rest of their lives. That amount will be partially or fully-taxed depending on how much money you have saved comes from your own pocket.
When saving for your retirement, you should save as soon as you can, so why not start now? To make sure you can afford it, you could start by taking just a few dollars from your weekly or monthly pay and put it towards a pension, annuity or even a savings account. It will help you to get into the habit of saving and, over time, will give you something more substantial to live with once you retire.
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