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How to save money for your retirement

by on March 29, 2019 in Business, Latest News, Lead Article, News you can use, Nuggets

How to save money for your retirement

We all know that saving for retirement can be extremely difficult, especially when you have other, seemingly more important, outgoings to consider.

However, there are ways to save for your retirement on a budget, and this article will consider the best ways to do so, and get the most out of your savings, without worrying about other costs.

DO Track Your Pension’s Performance

It is important to track your pension’s performance to ensure that you will have the right amount of money that you need to support yourself and your partner well into retirement.

Although it can be easy to let your pension scheme build up gradually without checking its growth, it is vital that you do so.

Failing to acknowledge your pension scheme can mean that you may not notice changes to your pension which may affect the final amount. For instance, if your circumstances change, your pension scheme may not be growing as much as you would like, which may cause you to have to invest your money elsewhere.

DO Auto-Enroll in Work Pension Schemes

Under new regulations, employers must auto-enroll their staff within a pension scheme. However, many people still choose to opt-out of this system.

It is best to avoid opting out of your pension scheme where possible as pension schemes can greatly increase the amount of money that you have available to you on retirement. It is compulsory for employers to pay 0.8% of their revenue into pension schemes, which can increase your pension by a significant amount than if you opt out.

DO Save for Retirement

Although retirement may seem far off, you should always save money for your retirement, even if this is just a few pennies each month. Although you may feel as if you do not have the profits to pay into your pension, doing so can increase the amount of money you have in your fund by a large amount.

This is due to the world of compound interest rates, which exponentially increase in direct correlation to how long you save for, meaning that saving the same amount for longer will provide your retirement fund with more money than if you rush to save up at the last minute.

DON’T Rely on Home Equity

However, there are some things that you shouldn’t do to save money for your retirement, and this includes releasing equity.

Although many people who have not saved for their retirement over their lives decide to release their home equity to support themselves in later life, there are many negatives to doing so, and you should consider these before making a decision.

DON’T Buy Annuity Before Shopping Around

You should also shop around before buying an annuity. The best annuity deals will probably not be with your current pension provider, and so seeking these on the open market is the best way to get the most successful deal for you.

DON’T Rely on retirement

Last but not least, you may be wondering: why can’t I just rely on my state pension?

State pensions only provide you with £115 a week, which can be difficult to live off if you still have rent to pay and you will only be given your state pension according to the average life expectancy, which could leave you waiting some time after retirement to gain from it.

Therefore, ensure that you have the space for a little luxury by having modes of extra income.

If you want to find out more about your pension, contact Portafina to speak with a specialist advisor, or follow their social media: Portafina’s Facebook, Twitter, LinkedIn or Youtube.

Disclaimer: The information above is not financial advice. For any financial decisions you need to make, please talk to a qualified financial advisor before you do so. 

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