Building your nest egg
Ideally, you should start saving for your retirement in your 20s, or as soon as you begin earning. The reason is that if you delay starting to save until later in life you will need to save a lot more each month to reach the same size retirement pot than if you had started sooner.
A male who starts saving at age 30 can accumulate a pension of £10,000 a year at age 68 by saving £149 a month, according to figures from Standard Life. But if he waits until age 40 he would have to invest £290 a month to receive the same retirement income.
How should I save for retirement?
Pension funds are tax efficient savings vehicles which can be accessed from age 55 or above. They are the most popular way to save for retirement and with the new rule changes affecting how you can draw your pension this makes them even more attractive.
New Individual Savings Accounts (NISAs), National Savings & Investments (NS&I) and property also offer tax-efficient investments which can be used to complement saving into a pension plan for your retirement. Incorporating these options provides your overall retirement planning with diversity, true to the old advice to ’not keep all your eggs in one basket’.
It is never too early to start retirement planning and the sooner you take action the greater the benefits will be. Contact a member of our team for more information.