Retirement can appear like a long time away in your 20s. ‘Life is for living’ and money is for spending now or saving for more short-term goals.
We meet many 20-year-olds with big aspirations that typically include a short working life and an early retirement! So while pensions may not be big on your priority list now, it's really important to realise that a little put aside now can mean a lot later on. And tax relief is available from the Government on any pension savings you make.
The amount you need to save depends on a number of factors, such as:
- When you’d like to retire.
- Your age now.
- What kind of lifestyle you’d like to have in retirement.
- Any pension arrangements you already have in place (from previous or current employers).
- How much you can afford (bearing in mind that current tax relief can effectively cut the cost of your monthly savings by almost half).
Company Pension Plans
If you have access to a Company Pension Plan, now is a good time to consider joining. Remember, your employer is likely to contribute to it too: not joining would be like saying 'no' to a salary increase. Plus, pensions can be very flexible.
If your employer has established a Company Pension Scheme for you and you haven’t joined it, you could be missing the opportunity to have 3 people** (your employer, the Government and you) contribute to a savings plan with only one beneficiary – you!
For advice on how to set up a pension and start saving for your retirement, talk to a qualified financial advisor today.
*Assuming higher rate taxpayer 41%. It is important to note that tax relief is not automatically guaranteed; you must apply to and satisfy Revenue requirements. Revenue terms and conditions apply.
**Under an employer sponsored pension arrangement, your employer can contribute; you can contribute, as will the Government, with generous tax relief incentives.