Planning For Your Retirement
By Roberto Bell
At 25, nothing could be further from most people's mind than their retirement, after all, when you're young you should be having fund and enjoying yourself, rather than worrying about what's going to happen in 40 years.
The thing is though, if you want to be able to enjoy a comfortable retirement, the earlier you start planning for it, the better. The longer you give yourself to save up for your retirement, the more you can put aside, which will give you the option of taking early retirement rather than working later.
The most important thing to do at the first stage of planning for your retirement is to set a realistic goal. The best way to do this is generally to sit down with a pensions planning expert, who can advise you on how much of your salary that you can put into a scheme, what tax benefits are available to you, and give you an idea of how much your annuity will be worth at your chosen retirement date.
Aside from a personal pension, which should be set up as early as possible, many investors are now considering investing in property to offer an additional income stream in retirement. Buy to let is a popular choice, as this method of investment will allow you to take out mortgages on additional properties, which will be paid directly through the rental
income that the tenants pay.
At the time of your retirement, you can continue to use the house to generate income from rent, or, if the housing market has risen substantially, sell off your portfolio of properties, and invest the cash that you have made.
Throughout your life, aside from a personal or company pension scheme, you should also look at what other investment opportunities are available to you. The actual amount that you can put into your pension and get tax benefits is capped, but that should not stop you from exploring other avenues in maximizing how much you can save for retirement. Consider mutual funds, stock markets, and even direct investment in businesses.
One thing to remember when planning your pension investments is that throughout your career, thanks to promotions and inflation, your salary will rise over time, and that it will become easier to afford to put away more money as time goes by in order to ensure that you are well catered for when you finish work.