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How much should you really be saving for retirement?

26th October 2018

Retirement should be the time in your life where you’re able to relax and enjoy the fruits of your labour – everything you worked hard for throughout your working life. However, simply paying into your savings or a pension for when you retire might not allow you to do this. Are you putting enough away now to give you the retirement you want? Do you know what “enough” looks like?
Here are a few things to consider, to help you get started.

When to start saving?

Clearly the earlier you start saving for your retirement, the more time you have to put money away. Conversely, the longer you leave it to start paying into your pension or savings, the more time and money you’ll need to make up. The earlier you start paying in, the lower the percentage; delaying will just mean you need to pay in more later on.

Making the most of your pension contributions

Contribution matching by employers can really help build up your nest egg. It’s worth not only keeping up to date with how much your employer is currently matching but also how this figure will increase if you up your contributions. Being honest about how good you are at saving will help you capitalise on your positive habits and combat those which might thwart your attempts to build up your pension.

Prioritise your savings

Make sure setting aside money for saving is the first thing you do, at the start of the month, rather than putting away whatever you have left at the end of the month. As soon as you get paid, after allowing for any payment to service any debts, make sure your savings leave your account. If you receive a pay increase, make sure you take the opportunity to bump up your contributions so that the extra money doesn’t all go towards the ‘here and now’. Most importantly, don’t give up. Even if you start saving below the rate you should be putting money away, this is better than not saving at all, and helps to make saving a habit for when you’re in a better position to increase your contributions later.

 

Have you reviewed your retirement date? Read our factsheet to see how you can reach that date sooner.

Reference – BL015 – Aug – 18

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