Saving for a pension- It’s not the get rich quick option, and in a tough financial market it may seem like saving for retirement can take a back seat, you’re only young after all. It’s a common fallacy. Don’t be tempted into apathy when it comes to retirement planning, saving a little now could leave you far better off in the future.
Once working life draws to a close many of us would like to enjoy a relaxing and well deserved break as we move into our twilight years, and the sooner you start to prepare and save for a pension income the more generous it is likely to be. There’s no doubt about it, retirement planning is all about the long-haul and in most cases the longer you are able to leave you pension fund invested the greater the level of growth you are likely to see.
You may of course be entitled to social security payments when you retire, and while it is important to investigate all possible income streams that could support you in your old age, social security is unlikely to meet the full cost of living maintaining the standard that you set before retirement. As a result, saving into a retirement pension plan is still important even if you do find that you may be eligible for social security or other state benefits.
So what can you do to secure your future? You need to investigate you options. There are a number of different ways you can save and invest for retirement, through IRAs or 401(k)s for example, many of which offer excellent tax benefits and exemptions meaning that every dollar you put away is worth that little bit more.
The type of retirement fund most suitable for you will depend on a range of factors including:
- The age at which you wish to retire
- The age at which you start your pension saving
- The risk to return ratio you are comfortable with.
- Whether you are currently employed and whether your employer will contribute to your savings.
- How accessible you require your funds to be.
Doing your research now will pay off later, if you are unsure you may want to speak to an independent financial advisor who can help guide you through your options.
Make the most of employer contributions
If you are an employee and your employer is willing to match your contributions to a pension scheme such as a 401(k), put your name down and make the most of the opportunity. Every penny counts and when your employer contributes its essentially like getting a pay rise- it’d be crazy to turn it down!
Plan for a better future
Don’t scrimp on retirement savings now, set a goal, start planning and enjoy a greater sense of security and financial freedom in later life.