Did you know that almost 60% of people over the age of 40 have not started saving for retirement? Additionally, another 25% are not having enough for the day they enter their golden years. The reality of these shocking figures is that those over 40 will either only be able to retire much later or will have to save more than they are now. But, saving for retirement is about more than picking the first best pension.
There are a number of options available to those who want to save a little extra for their retirement. While some might be a great idea, others may be better ideas. Here are a few options for saving for retirement:
Workplace Pension Pot
Through this type of pension scheme, you and your employer agree to certain terms of payment into the scheme. All the payments are done by the employer. One of the best benefits of paying towards a pension in this way is that you do not have to be reminded to make monthly contributions towards the fund. The monies for the fund are deducted before you get your wages. Depending on the arrangement made with your employer, they may also contribute to the fund and at the time of retirement, you’ll be granted a tax relief from the government too.
Private Pension Investment
If you do not have a workplace pension agreement in place then you may want to consider investing in your own personal pension. Alternatively, you can also choose to start investing in a private pension scheme even though you already have a workplace pension. This can be done as a means to additionally boost your current pension savings. These types of pension plans are run by private companies. These types of plans for pension usually work best for those who are self-employed.
Savings As An Alternative
It goes without saying that having a little extra stashed away for the day you retire is always better. Putting money away in a separate savings account will give you the flexibility to withdraw funds when you want to and you can find the best savings account for you if you compare products. Additionally, you will not be restricted to how much you will be able to withdraw at any one time. Opting for only having savings can be a dangerous game. You will not get the added tax benefits when you hit retirement age. It is suggested that you always have additional savings as well as pension pots.
Many people are turning to buying property as a means to boost their investment portfolio. This too has both its pros and its cons. If you buy cheaper property and pay it off by the time you retire you’ll be able to rent the place off to provide an alternative to receiving your pension. Alternatively, you could also sell the place when you retire to give you a lump sum payout. The con of doing this would be that you will be subject to property taxes and you will lose some of your investment. Another con to doing this is that managing property becomes difficult especially in retirement. You’ll, therefore, end up spending money you don’t have on a company that will manage the property on your behalf.