If You Want a Decent Retirement, Then Begin Pension Planning in Your Late Twenties

If You Want a Decent Retirement, Then Begin Pension Planning in Your Late Twenties

Entering into your mid-20's is not much fun in the present climate, high unemployment, rent shooting up and stagnant wages if you do find a job isn't what many people had in mind when graduating from university.Setting out plans for a pension should also be added to the list of problems, an ageing population and retirement ages being raised slowly, with the mandatory age being scrapped. All this means the state pension alone will be nowhere near enough to live comfortably on in 50 years, if current trends are anything to go by.The pension age calculator on the UK governments Directgov site calculates that a 26 year old (born in the year 1984) will be able to retire at 68 years old, in the year 2052.Excluding inflation, because we have no idea where that will be in 2052, but if the state pension rate in 2052 is equivalent of the current 97.65 weekly benefit. Then it's not great, but not stellar either, and that's only if you are financially sound with the mortgage repaid and no other debts hanging over yourself.Though the number of people reaching the retirement years debt free is shrinking every year, this is why pension provision needs to be started earlier in people's careers. Ideally, as soon as your income is enough for you to afford the monthly payments into a pension scheme, it should be started. With different pension funds, offers and deals on the market, approaching a pension expert should be the first step, so you know of any potential pitfalls in the Ts & Cs or small print before you sign up to anything.The majority of people just end up entering their employers' joint contribution pension scheme, if they can get in that is. It's been a headline news story for years that the major and blue chip companies are closing the doors to new employees when it comes to the pension scheme.Final salary plans are a dying breed sadly, if you're not already on board on the likelihood is you've missed the boat completely as they become too expensive for companies to maintain. The nest best step is research what the high street's banks and building societies are offering.For some people, they will find the pension plans offered by the banks, insurers and building societies to be more to their taste and needs than your employer can offer. These institutions are better placed to offer personalised schemes to suit your needs, the one drawback being you'll have to shop around the old way; no comparison site can help with pensions because of their nature and length, not to mention the market can be a bit of a maze.The most informative way of finding the best pension schemes is ask in every branch of every financial institution, though this way you will not gain the whole picture as any advice you gain from these branches will be biased. To counter this, you should start with an independent advisor who will offer impartial advice for the whole pension market, telling you what is best for your circumstances without the need to plug any plan or scheme. Not only this, but the complexity involved with starting a pension plan can be surprising, with choices to be made on stakeholder plans and Sipps as one example, getting it right now ensures you don't lose out in the decades to come.When searching for a financial advisor (IFA as they're mostly known) always double check their credentials and experience. As with everything, shop around your local area to find the one you feel is best qualified and you feel most comfortable with, from there on it should be much more easy sailing through the choppy waters of the pension plan market.

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