Why It’s So Important to Start Saving into a Pension in Your 20s
When we’re in our twenties, retirement seems a lifetime away. We’ve got years of work ahead of us, and plenty of adventures to enjoy before we can even consider giving up work. The very idea of retirement might be something that you struggle to comprehend when you are just starting on your career journey. Pensions are for the elderly, and not something that you need to worry about for quite some time, right?
Well, the reality is often quite different. The UK state pension is just £175.20 per week. Without careful planning and preparation, you might be forced to live on far less than you are used to. Here are some of the reasons why it’s never too early to start saving into a pension.
You Never Know What Might Happen in the Future
You might be working in a well-paid job now. You might assume that you’ll gain promotions and pay rises over the next few decades, until you are earning a very comfortable salary, and feel able to invest a sizable chunk of money in your retirement.
You may also assume that by the time you retire, you’ll have paid off a mortgage, and perhaps even inherited money or property from family.
But you can’t guarantee any of this. You never know what might happen in terms of your health or the economy. You might become unemployed in the future, or struggle to buy a home. You might be taken ill, and so find yourself unable to work. Start saving for your retirement now, and at least you know there’s something in the pot, no matter what.
A Financial adviser can help with your retirement goals. They generally work for companies such as Portafina or work on a self-employed basis.
To Ensure a Good Quality of Life
Imagine having to live on under £200 a week. Yes, if you are lucky, you’ll have paid off your mortgage, but even paying for other bills and food would eat most of that up. You certainly couldn’t enjoy the same quality of life as you did while you were working.
Having a good pension means that you can live to the standard you have grown accustomed, and even have enough to complete your bucket list.
We’re Living Longer
In recent years, the retirement age has started to rise. While our parents might have retired in their early 60s, we’re more likely to work until we are 70. But, the average age has also risen. Once you are retired, you could live for another 20 or even 30 years. That’s a lot of life left to enjoy, so it makes sense that you should take longer to save for it.
If you want a comfortable and happy retirement, where you can travel, indulge your family, and enjoy spending time with your friends, you’ll need to plan for it. If you’re going to be able to complete your bucket list, and pay for your care, without having to be a burden on your family, it’s going to cost you. The sooner you start to save into a pension, the more fun your retirement will be.
