How Not To Plan For Your Retirement

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How Not To Plan For Your Retirement

How Not To Plan For Your Retirement

Okay so we don’t want to patronize you here. You’re at our website, reading an article about finance and retirement planning so you’re probably quite an intelligent kind of person, willing to spend some of your time researching ways to improve the size of your retirement funds and therefore quality of life.

Many people get a bit down when they are forced to think of their retirement. It is after-all a time where you will be planning for your life winding down, not being able (or not wanting) to have to work so you can enjoy life a little more. We don’t want to get you too worried about it but its quite an important factor to be looking at regardless of your current age.

Planning for your retirement doesn’t have to be a time of worry or concern. For many it is simply a case of making use of a works own pension fund plan. Many companies  have a pension plan whereby if you sacrifice 5% of your earnings every month the company you work for will match this 5% with their own money, effectively allowing you to set 10% of your wages aside every month. So if you’re on a salary of around $2,000 per month then you can expect to get $200 put aside into your own personal pension fund every month. In a year this will have given you $2400, quite a tidy sum if you consider that in 10 years this would have given you $24,000.

At the moment pension planning doesn’t seem to be in the mindset of many people, especially in the UK. For the third year running the number of people contributing to their own pensions has fallen, causing the potential for an issue when people come to retirement age. In the UK the people who hit the retirement age of 65 will be given a state pension, if they’ve been paying their National Insurance contributions, which will be a weekly amount of around £65 (or roughly $100). Probably not enough to live on sure, but the idea is that people will have put their own money aside, either by making use of an employers pension scheme or by putting their own savings aside on a regular basis.

It can take a lot of discipline and planning to be able to take a set amount from your salary every month and to move it to a separate account for your retirement years. Its far easier if you can operate it through an employers account because they will usually match it, effectively doubling the money you will get, as well as dealing with all of the administration involved with withdrawing money from your salary and moving it to the pension fund. However if you’re self employed or are working in different circumstances to the typical person then you could set yourself up a direct debit (a regular standing order) which willl automatically move money from your account to a separate one.

So if you want to know exactly what not to do to  plan for your retirement then the best bad advice I can give you is to not bother setting up a pension fund. Go ahead and live your life without giving a jot about your future, without worrying about saving any money for your future. Sure you may have more fun but you’ll struggle when you hit 65 years of age, and need something to fall back on to enjoy your twilight years.

Posted by admin   @   19 March 2013 0 comments


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