The Earlier you Start your Pension the Better Life you will Have
Although you may have just graduated from university and have a mountain of debt, starting a pension early will pay considerable dividends in the future. The fact is that the sooner you start the more comfortable your retirement will be, and you may be able to retire sooner.
Retirement for you is a long way around the track, and this works to your advantage. This post explains why.
Compound Interest your Friend not your Enemy
Where credit cards and loans are concerned, interest can eat into your finances severely. You may be experiencing this at the moment. The interest compounds, that means it grows the size of the debt overtime if you do not pay off the capital. As such, you feel you have to concentrate on clearing these debts before you start saving for a pension.
The fact is however, that the compound interest which is the bane of your life where your debts are concerned works for you where your pension is concerned. As your pension pot grows, interest is applied year on year. As it is compound interest like your debt, it makes your pot grow fast. So if you’re putting in a £1000 per year for your pension, this will grow compound interest works away in the background.
Ten years around the track, your pot will be far in excess of £10,000 your have put in, and that is not factoring in free money.
Free Money from your Employer – Take it now
By law your employer will offer you a pension scheme, and often match your contribution to a certain level. So if your employer contributes 2% of your salary to your pension fund that is money that will build up your pot absolutely free. Overtime this mounts up as the compound interest comes into play.
Advice from Financial Planners
Conduct a few internet searches and read a few blogs about pensions, and it soon becomes clear that to win you should start early. Although you are new to the world of work and you probably have competing debts, the one thing you have in abundance is time. Most people do not think about retirement until they are in their 30s and 40s, and by then, for many it is too late to build up a good pension pot.
Start now and make your retirement sweeter.
My Award Winning Financial Planning Advice
To learn more about pensions, how they work, and how I can help you select the right one for you, click here to contact me or complete the CALL BACK SERVICE FORM on this page. Start contributing now and start on the right path to good financial management now.
Sources:
Fortune
Wall Street Journal
For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]
