When you’re in your 20s, 30s, 40s or maybe even 50s, you may find it strange that people are recommending that you should be saving for your retirement. These days, as the state pension age continues to rise, it goes without saying that retirement can feel like a lifetime away. However, you can guarantee that you will thank yourself in your later years of retirement for taking the time to invest in your retirement from a young age.
Even though anyone who has paid the qualifying years of National Insurance contributions should receive a full state pension, unfortunately, the amount you will receive often isn’t enough to comfortably live on let alone allow you to enjoy your retirement. So, it goes without saying that it is best to take control and save for your own financial future alongside your pension. If you’re curious as to how you can do this and you’d like to find out more about retirement savings and investment strategies, keep reading today.
A workplace pension is a way that you can invest your money for your retirement with your employer. Both you and your employer will put a percentage of your wage into a pension scheme automatically every payday.
There are different types of workplace pension schemes and the amount you will automatically put into the pension will differ. But, the best way to invest money for retirement is to contribute more than just the minimum amount if you can afford it, this extra money really will all add up.
If you’re unable to get a workplace pension, say you’re self-employed for example, it is beneficial to get a personal pension instead. You can then pay as much as you can reasonably afford into this monthly to ensure you’re still putting money aside for the future.
Even though you won’t have the advantage of an employer contribution to your pension, it is still worthwhile setting up a personal pension. If you’d like something really flexible when investing in your retirement, look into a SIPP pension too, these give you the freedom to choose and manage your own investments.
ISA saving accounts
It can also be beneficial to save alongside your pensions and many turn to an ISA saving account to do this effectively. ISAs offer a tax-free way to save, and there are several different types of ISA that you can choose from.
When specifically investing your money for retirement, it may be beneficial to look into something like a Lifetime ISA, where the Government gives you a bonus of 25% of what you pay in. You can make free withdrawals from your Lifetime ISA when you turn 60 making it perfect for retirement.
Stocks and shares
One of the best ways to invest your money for retirement, when you start at a young age, is to use stocks and shares. Generally speaking, stocks and shares outperform money in savings accounts and they can provide you with a huge pot for a comfortable retirement.
Many are unaware that you can invest in stocks and shares ISAs too. These are different from cash ISAs and you will still be investing rather than saving but they can be a brilliant option if you’re not confident using stocks and shares investment platforms yourself.
Investing your money for retirement
Hopefully, now you know a few of the best ways to invest your money for retirement, you can begin to make use of the strategies that are most suitable for you. You have the ability to make a dramatic difference to your retirement income and there is no denying that it is worthwhile thinking about your retirement now, no matter how young you may be. So, take some time to consider how you would like to invest your money and start saving/investing today.
If you’d like to find out more about preparing financially for retirement and later life, visit the Financial Investing & Trading website. We are incredibly passionate about helping people take control of their financial future and start their financial journey today. Not only do we have a range of online courses that may be beneficial to you but we also have a resource centre full of helpful information. If you have any questions at all in relation to anything you’ve seen on our website, don’t hesitate to get in touch, we will happily assist you further.