We know it. Pensions can be a complicated topic. It definitely isn’t as simple as ‘save today for a better tomorrow’! How much to “save”? What constitutes a “better tomorrow”? Most people do not even realise that these questions should be asked until after their retirement, when their funds fall short and expenses exceed the income. This only confirms the old saying that “A man is not old until his regrets take the place of his dreams”.
On the other hand, there also exist some pretty astute folk among us who ask the right questions at the right time and take precautions to enhance their future prospects in life. These kind of people are left with no regrets when they grow old and live a much better life thanks to a little preparation. We learn from these people and spread the message so that more and more people can benefit. After all, who wouldn’t like to minimise financial stress in their late 60s when the bulk of your career is in the rear-view mirror and your body is showing signs of fatigue?
Research studies confirm that the earlier you start your pension, the easier it is to accumulate the required level of funds which will allow you to enjoy a comfortable retirement. In the modern age, longevity is obvious; it may be the case that your life after retirement is equal to the number of years you’ve spent toiling in office. This requires you to start saving from day one. Remember, this is a trade-off between your own current and future consumption so no need to give it a second thought.
Many people recommend a financial advisor when advice related to pensions is required. These experts can help you in many technical and experiential ways. Additionally, there are many useful guides on internet which are absolutely free of cost and with a little research, you may be able to gain the same knowledge which a costly financial advisor has to offer.
There are some helpful tools like pension calculators which allow you to calculate the lifetime value of your pension. These tools can also compute the effect of tax relief on your pension contribution and estimate the approximate amount which you’ll receive in future. Based on that information, you can decide either the amount calculated will be enough for your future expenses or you need to save more. These tools aren’t only cost efficient but also, time efficient and accurate.
Another important aspect is to keep yourself updated with the latest policies of government as well as your own institution related to pension, tax or anything relevant. These policies change on regular basis and remaining informed becomes important so that you can render your saving decisions according to the latest policy changes. Sometimes little ignorance brings us many unwanted shocks and to avoid them, we must stay up-to-date.
If you have various pension plots with different providers, combine them! Higher the sum of pension, more it will add up over the years until your pension. Also, having all funds in one place makes it easier for you to keep track of your overall savings. Some companies charge for transferring so, check first if this is the case and choose the best scheme for yourself.
No matter what age you are, making the right pension decisions should be your priority. Boosting your pension is not very difficult if you take advantage of all the resources present around you. The future may look distant but soon enough, your calendar will show 2050 and your company will issue you your retirement letter with a handshake and bottle of bubbly to send you on the beginning of the long and fruitful journey of life after work. At that time, if you don’t want to worry about money and you want to enjoy the vacations that you have earnt after years of service, then start preparing today.