RETIREMENT PLANNING
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For most of us, retirement is something we look forward to – and we want to be able
to enjoy those things we’ve spent years dreaming of and planning for. Whether you
need the peace of mind of knowing that things will stay exactly the same at retirement
or you want the freedom to be able to live a new life altogether, the final value
of your retirement policy is crucial. It allows you the luxury of choice. To choose
to live life on your terms.
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It pays to invest early
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The Chinese have a saying – ‘a journey of a thousand miles starts with a single
step’. The English have another – ‘the early bird catches the worm’. The ideal strategy
for saving for retirement is a combination of both wisdoms. Starting to save early
puts you in a position to make the most from your investment. This is due to the
effect of ’compounding’. Compounding means not just earning money on your investment,
but also on the amounts your investment grows by.
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Compounding depends on:
- How much money you invest
- How much time it spends growing
- Its rate of growth
You can control both a. and b. and by investing in a regular payment savings scheme
you get exposure to the stock market, where there is the highest potential for your
investments to grow. It is important to start saving early in order to benefit from
the power of compounding returns – every year you wait can make a significant difference
to your end investment value.
“Compound interest is the world’s greatest discovery.”
Albert Einstein
Regular saving requires discipline and habit, but it does mean you can plan for
expenses you know are coming your way such as education
costs, funding retirement, or even a wedding or two.
It can also give you the opportunity to enjoy some of life’s little extras – an
exotic holiday, for instance – or a career break.