It’s something we all think about doing, but over half of all those of working age never plan properly for their retirement. Most think that their state pension alone will keep them going but this will not provide a comfortable retirement in which you don’t have to worry about affording to keep warm.
It’s now become a bit of cliché, but it’s true, the longer you leave paying into a pension scheme the more you will have to pay into it when you do. Suddenly remembering 10 years before you retire that you have forgotten to save for your retirement puts financial stress on you and your family. After all we all want a comfortable retirement.
It is estimated that if you wish to retire on £50,000 a year throughout your retirement years that you will have to start thinking about it as young as possible to keep up with regular payments. This rings true especially as many final salary schemes in the private sector are closing and the new UK coalition government will start to assess public sector pensions. It is becoming increasingly the case that you will have to fend for yourself.
Example: if a 25 year old and a 35 year old started saving towards their pension at the same time, with the aim to retire at 55, the 25 year old will have to save £300 a month while the 35 year old will need to put aside £805 a month.
This shows just how important it is to keep on top of planning for your retirement
In fact, research from Standard Life shows that those aged between 45-54 are most likely to become disengaged with their pensions and not know the value within them. This is shocking as this age group are the ones heading towards retirement and need to have their plans in order.
It is more important than ever before to plan properly especially as the UK government will be raised the state retirement age to 66 from 2016, France will be raising their retirement age to 62 and Greece to 65. Other countries could follow suit as they each try to work out the best way to cut economic spending.
Don’t get caught out at retirement, plan properly and live comfortably.
For more information on pensions and retirement planning, visit our website at www.wealthandlivingmagazine.com
