Pension Planning Tips for 20 and 30 year olds…
Those within their 20s and 30s rarely consider planning for their retirement. Your moto to life is ‘live life to the full’ and ‘live for the now’. However, if you’re young and want a comfortable retirement, pension planning is something you need to undertake!!
Regardless of the decade, we have prepared for you a guide to ensure your retirement lifestyle is one of comfort, ease and financial security. Having enough income for basic day–to–day living is a reality for retirees and some find it a challenge.
Failing to plan for your retirement can have severe implications for not only you, but also your own family. Living off a limited expenditure from one week to the next is not exactly a desirable lifestyle.
Let’s face it life expectancy is only increasing and if we are going to be around a lot longer, then we need to plan profusely to guarantee enough money for the future.
Lucky for you we have pension planning experts with 33 years’ experience to help you plan for a richer retirement.
20 years in the making …
At this stage in life most of us have graduated from University and are beginning our adult adventure. Our main priority is getting our foot on the career ladder and earning a proper salary. However, there are certain things which must not be forgotten about when it comes to pension planning!
Tip 1 – Clear that Debt
Most of us in our 20s have exhausted all student overdrafts. Student loan bills are coming in quick and fast. Before you know it we are no longer students and being forced to pay back all that borrowed finance.
The best advice from our pension planning experts is to clear that debt as quick as you can so that you can begin saving.
Tip 2 – Open an ISA
Although we are frantically trying to pay off student finance loans, overdrafts and credit cards, whilst feeding our social agenda; it is important to try and put some money away.
It might seem difficult at first, however by opening an ISA you can send a small amount to this account on the 1st of every month, or as close to payday as possible so that you won’t even notice it’s gone!!
Tip 3 – Save Within Your Means
We may have begun earning our first proper salary, but early graduate positons are not overly well paid. So once the bills have been deducted from your wage, then save what you can afford; leaving yourself with enough to cover the remainder of the month.
Although there are more pressing matters at hand and much more exciting things to spend your money on, starting to save is a healthy trait and one to be sustained!
Tip 4 – Employer Contributions
Although the main priority at stake is clearing your debt, if your current employer offers contributions to your workplace pensions, then it would be rude not to take them up on that generous offering!
The amount an employer contributes to workplace pension tends to vary. Ultimately depending upon the amount paid in by you, your employer and tax relief from the government. These elements are usually calculated as an amount of your earnings.
The BIG three O!
Tip 5 – Reassess your financial circumstances
When you arrive at 30, life is much more demanding. Whilst you’ve climbed further on up the career ladder, you may consider making your imprint upon the property ladder. Perhaps you’re getting married, having children or maybe all of the above.
However, all of the above requires A LOT of money! Your financial outputs will need assessed in order to determine what you can afford to save.
Tip 6 – There’s no time like the present
Now that you’re in your 30s and may have a family to plan for, it’s time to think more seriously about retirement and how much income you will need to for a comfortable retirement.
Your first step in getting serious about pension planning is to join your companies pension scheme, if you haven’t done so already! It is important to join a pension scheme if there’s one provided. It is a clear promotion, salary boost and free money no matter what way you look at it.
Tip 7 – Look closely
By default, often you are opted into your company’s pension scheme. However, it is important to pay attention to the detail. According to our pension planning experts, there are a range of investment options. Sometimes people make the mistake of staying with the default investment option, it is important to revisit this and match investment with your future financial objectives.
If you need assistance in securing a richer retirement, contact Financial Foresight’s pension planning experts today! We are PFS accredited for our services in retirement and later life advice.
