Saving for Retirement

Saving for Retirement

by arky on 22 Feb, 2011

Saving for retirement has never been more important. The ageing population of the UK is putting a strain on public finances both in terms of the NHS and the state pension. The more pensioners there are, the less money there is to go round.

As such, it is absolutely crucial to have some form of private savings for your twilight years, as the support you can expect from the state is minimal at best. People have always said it is never too early to start putting money into a pension, and that has never been truer.

Although it’s almost impossible to look ahead so far, a useful exercise in determining when you need to start saving is to evaluate how early or late you would like to retire and what lifestyle you would like to attain, you can get some idea of how much you will need to have put by, and therefore how early you need to start saving, and how much.

Once you have a rough idea from this, you can evaluate how much you’re likely to get from the state (be pessimistic) and the best way of putting money aside. The easiest way is to start depositing into a pension fund, where if you shop around long enough, you should be satisfied that the fund manager will make the best use of your savings.

Alternatively, you could take a more hands-on approach to saving for retirement and actively manage your money by moving it around savings accounts and even investing some. However, this option is only recommended if you want to spend a large proportion of your pre-retirement life worrying about retirement.

Either way, taking an active interest in saving for retirement as early as possible is absolutely essential. Which direction you take will depend on how much time and effort you’re willing to dedicate to it, but the overall sum of both cannot be zero – otherwise you will find yourself in a very difficult situation come retirement.

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