Who doesn’t dream about the day they can finally retire? Many people even have a countdown to their retirement date! But a surprising number of people in the UK are woefully underprepared for their golden years. The best way to make sure you’re ready for the momentous occasion is to set up a retirement plan as early on in your working life as possible. A part of every retirement savings plan should be a robust pension plan, the best of which will also involve contributing as much you can, as often as you can.
This does not constitute advice and advice should be sought in all instances before acting on it.
Saving for your future
For a detailed look at how to prepare for retirement, we’ve put together some useful fact sheets on
But there are also ways for you to supercharge your retirement savings and the earlier you do, the better. Don’t live to regret putting off your pension savingsplan.
Set yourself goals
It’s no surprise that there’s a clear connection between setting goals and healthy pension pots. What do you want your retirement to look like? If you dream of traveling, living an active lifestyle, or even living comfortably enough to support your family, you are more likely to save more of your income into a pension pot than those that don’t have a clear picture of their future.
See the difference
To fully understand the difference setting goals makes, let’s look at some statistics from the Set the Right Goals study from Zurich UK to compare the potential savings of a “goalless” saver to a “goal-setter.”
The salary for someone with approximately 5-9 years of experience is around £30,000. A goalless saver only tends to only save about 5% of their income while a goal-setter normally contributes about 7% of their salary into a pension account.
By the time a 28-year old saver reaches 65 a goalless individual may have only saved just over £87,000, meanwhile, a goal-setter will have saved close to £118,000. Putting aside any additional contributions you or your employer make, this means you could have an additional £30,000 to live your life to the full during retirement.
Get emotional
Setting goals also goes hand in hand with solid financial management as goal-setters are more likely to have savings and investments. An emotional attachment to a retirement dream, such as supporting family or exploring the world, provides something tangible for goal-setters to save toward and makes them take action – setting up various outlets and assets to count on later in life. It seems that having something to work for inspires individuals to be smart and savvy with their finances.
Monitoring the state of your financial affairs can be a full time job – especially in today’s economy with Brexit and Bank of England base rate hikes looming. But ensuring you set goals and always keep those in the forefront of your mind, you will not only be motivated to save toward retirement, you’ll have the drive to save as much money as possible, as regularly as you can.
Your pension options are seemingly endless, so choosing the right mix of savings, investments, and assets to provide you an income during retirement might sound like an ambitious undertaking.
If you feel it’s too overwhelming to do it all yourself, seek out a financial advisor to provide guidance and advice.
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