Pension and retirement funds are crucial to everybody. But unfortunately it is one of the least financial planning we think about. Eventually everybody has to stop working. After years of hard work you should be able to put your feet up and enjoy some peace.
That is not the time to be worrying about your bills and other things that you need money to accomplish. So what happens to your expenses? They don’t go away. In fact, your essential expenditures may become more expensive if you factor in inflation. It is time to take action and if you have just started working, you can start early.
Early planning is best for pension savings. A regular amount put away yields a lump sum amount through the years. There are many examples where a disciplined investment started early has proved to be more beneficial than chaotic lumps at irregular intervals. So start early.
Subsequently is regarding the amount to be saved each month. How much is sufficient? Well, that depends on your ability to pay. Try to put away a fixed amount. As it is always said pay yourself first when you receive your salary or income each month.
If you are employed try to save in work linked pension plans in which your employer contributes some amount. This is beneficial as these pension schemes are invested in government bonds and offer good returns with stability.
Many things have to be considered when picking a pension plan. Find out how much of your pension is taxable and at what percentage. It pays to take the advice of your personal financial planners or legal adviser who has experience and knowledge in pension and retirement program. They are not part of any one organization pushing those plans. They will work individually with you to provide the best plan exclusively based on your needs.
Find out if the pensions or at least a part of it will go to your spouse or dependents. So not blindly trust that it will automatically go to them. Read the fine print! Take charge and do not be a passive participant.
Usually pension money is retained with the employer till a worker retires. It is good to know whether this money is safe and in the event of employer declaring bankruptcy or going out of business what happens to the money. Always ask relevant questions and never assume things. The stakes are simply too high.
You should also start investing in bonds and share market early on in your career. Then you can afford to take risks. But be sure to reduce risk taking as you reach middle age and gradually taper it off. This way you can put away a small nest egg of savings. Also try to ensure you invest in property so that you have additional income as rent.
You can also go online and check out all options available. If you do not have the resources and time, hire the best financial planners to do the job for you. They will shop around and get you the best deal.
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