A white sandy beach… Blue sky… An immaculately dressed couple lovingly gazing at each other, whilst they walk into the sunset…
You’ll have seen that picture thousands of times, whenever the word ‘retirement’ is mentioned. But just how much of a cliché is it?
According to new research, it’s worse than a cliché. It’s practically fictional. The average private pension pot will provide a retirement income equivalent to 14% of the minimum wage.
Forget sandy beaches. Forget the longest holiday of your life. Retirement could well be the biggest pay cut of your life!
Here I will take you through two methods of providing for your retirement, there will be some truly scary facts and there will be some peaceful reflection needing action that shows that its not too late to start providing towards your inevitable retirement.
1. Traditional Retirement Pension.
How could you avoid this retirement pay cut?
Most people will receive a state pension. Based on proposed new rules, this could be in the region of £7,500 a year. Some will also have additional sources of retirement income.
To build an income broadly equivalent to the current minimum wage of about £12,000 a year from private pensions you’d need a pot of roughly £220,000. The big question is: how do you build a £220,000 pension?
The answer will be different depending on individual circumstances and other factors. Also, you may need more, due to inflation, which reduces the spending power of money over time.
However, in principle the three factors most likely to affect the final value of your pension are the amount you contribute, how long you invest for and how your investments perform.
There are, however, three tips that could really help you get your pension on track. The good news is they are simple and require much less effort than you may think.
1. Don’t delay
Everybody knows: the earlier you start, the better off you should be. What not everybody realises is just how much better off.
Let’s look at a couple of examples.
Somebody starting a pension at age 18 and intending to retire at 68 could build a £220,000 pension by putting away as little as £50 a month, which the government will automatically boost to £63 through tax relief.
Delay by ten years, and everything else being the same, to build a £220,000 pension pot you’d need to put away nearly twice as much, £94 a month. Delay another ten years and you’d need to put away £182.
Roughly, every ten years you delay, you need to double your contribution to get the same result.
These example assumes net investment growth of 6%.The amount received depends on the investment returns actually achieved. Investments can fall as well as rise in value so you could get back less than you invest. Please note: tax rules can change and benefits depend on personal circumstances.
2. Make small, regular increases – they could go a long way
Would you miss £5 a month? That’s probably less than you’d pay for fish and chips but it could go a long way in your pension.
Consider this. John is 25 and contributes £50 net a month to his pension. If each year he increased his contribution by 10% – only £5 in the first year – he could reach the £220,000 mark by age 55 (based on the same assumptions as before).
Retiring at 55 is a distant dream for most people. The latest figures from the Office for National Statistics show the average retirement age is 64.6 for men and 62.3 for women, and it is predicted to get higher and higher.
3. Find out where your pension is invested
Private pensions tend to be invested in the stock market. The better your investments perform, the more your pension fund grows, and the higher the income you can expect when you retire.
This potential for growth comes at a cost though. Income is not guaranteed. Not all investments are the same. Performance can vary dramatically and even a small difference could have a significant impact on the size of your pot.
For example, take a net investment of £50 a month. If it grew at 6% a year (after charges), it could be worth £117,974 in 40 years. If investment performance was slightly worse, 4%, the investment would be worth £72,098, £45,876 less. If performance was slightly better, 8% rather than 6%, the fund value could be £198,308. Though of course, depending on investment performance, it could be more or less than this.
That’s all the facts about how a pension diminishes in size.
Now for the interesting fun part:
A true residual income if started and followed up, will provide you an increasing amount of income no matter how late you start.
You can truly start today by joining a true British Plc and benefit from:
- Working From the comfort of your own home
- In the hours that you want
- Alongside your existing job
- Great Service
- No products to sell
- True unlimited Income
- True residual Income
- Time freedom
- Personal growth
- Low start up cost (refundable)
- Economy proof
That’s only a short list of what you’ll experience but its not a bad start.
When you go to a lovely restaurant or go and see a great film would you recommend these to your friends?
With this business all you are doing is showing your friends, family and people you know, the benefits of the company and the money saving services that it offers and in return the company will pay you each and every month after that, as long as your friends, family and people you know are saving money you will continue to be paid month after month – it truly is a win win situation.
This can grow into quite a sizeable amount, so whether you only want to earn an extra £500 per month or you want to earn £1000, £5000, £10,000 per month or more, its up to you.
Yes its simple.
Yes It works – people always want to save money on things they buy anyway :)
Yes anyone can do it.
If you’d like to know more – click on this link : Tell Me More and watch the short 3 minute video explaining how it works & about the company and here you can also request an information pack from this page too, if after watching the video you would like to progress this further you can do this from the link or call us on 07930464461 where we can help explain your through the process.
Your Future Truly Is In Your Hands – What Would You Like It To Look Like ?