Even at a non-retiring age such as teens to early 20s, thinking about retirement should already be considered. After all, with retirement comes the pleasure of pursuing your passions because you are already reaping the benefits of your good old working days.
Before even talking about getting the most out of our personal pension plans, is there anything we can do now even if we’re still years or decades away from retiring?
Pre-retirement
A friend of mine had me calculate what may receive by next year if she were to retire. I personally found out that the amount of her contribution to a personal pension plan is directly proportional to the amount of pension that she will receive later upon retirement.
This only means that if we add a little more amount to what we usually contribute to (that is, a personal pension plan before reaching retirement), we can receive a higher amount later on.
Yes, even in our early 20s, you can already plan on how to have a passive source of income as well as savings. You may also start a budget plan, and stick to that plan especially when retirement is just around the corner.
What are the advantages of this strategy?
- First of all, you can guarantee that you will have savings because of your own discipline.
- Another will be peace of mind as you know how much money you still have. Rest assured, you have enough for buying food, paying the bills, and enjoying life.
- Last but not the least, you will feel accomplished because of the amount of preparation that you put into this decision.
In addition, you should also look into a wide variety of pension products that will fit your needs.
Close to retirement?
What happens if you’re already close to retirement age, say 35 or 50 years of age? That’s not a problem! You can still start a pension even in the late stages of your life.
The good news is that some investment and pension firms make it easy for individuals to start their personal pension. Some companies and investment agents are available online and even provide a convenient pension calculator to give you an idea of the pension that you will receive when retirement comes.
Tips To Maximize a Personal Pension Plan
If you want to make sure that you’re using your personal pension plan effectively, follow my tips and tricks to get the most out of your investment for retirement:
1. Find a good investment company
Aside from looking at reputation and trustworthiness, choose an investment firm that consider client preferences as a priority. Remember that not everyone wants to get cash when they retire. Some people think of investing their pension into real estate or a trust fund.
Try to look for firms that offer tax relief to maximize what their clients can get out of their pension. Some companies give up to 45% of tax relief to their clients depending on their client’s income tax.
2. Consider increasing your contributions
Adding a little more to your monthly pension contribution may already go a long way when you retire. Think of it as an investment for your future spontaneous vacations during your retirement.
3. Bring all your eggs in one basket
This tip sounds like a bad idea in terms of business or employment, but it works for pension. Instead of maintaining two or more pension plans, study the possibility of consolidating them into a single personal investment pension.
Retirement the time when you can reap the full benefits of your investment over time. Whether it’s a material investment (such as real estate) or a personal pension plan, you can rest assured that you will enjoy your current financial sacrifices when you retire.
