I hate to be the bearer of bad news, I really do, but someone has to say it. If you are under 40, the age of retirement has passed on. It is no more. It hasceased to be. The reason is quite simple: youwill not be able to afford it. There are exceptions, and you can be one of them, but only if youtake action now.
First, some facts to scare the life out of you.The full basic state pension is currently 119.30 per week. That works out as 6,203.60 a year. Do you fancy living on that for the last 30 years of your life? Worse, to achieve that princely sum you have to make 35 years of National Insurance contributions, otherwise you might get less.
Heres another worrier. The age at which you can claim this money is set to rise and rise. By October 2020, it will synchronise at66 for both men and women. It will hit67 by 2028. Thereafter it will rise with our growinglife expectancy, and at some point will fly past70 and beyond.
The state youre in
The statewill only ever give you the most threadbare income, and you will have to wait longer and longer before you can claim it. If you want to retire some point in your life, you need to start saving under your own steam.
Last year, pension providerRoyal London warned that British workers will have to carry on until age 81. Unless people start seriously saving, we are witnessing the death of retirement, it concluded. Do you really want to be working at such an illustrious age out of financial necessity rather than choice?
Invest, invest, invest
If you belong to a generous workplace pension scheme, then love, honour and obey it, andfeed it. Make the maximum possible contributions, even if it hurts, and in return you will getan employer top up and tax relief. However, do not assume this is enough on its own: employeespay around just 5% of their salary into a pension, they need to be savingaround 15%. You need to start investing offyour own bat as well. If you do NOT belong to a company scheme, saving for your futureis even more important.
The older generation used toenvy theyoung, but no longer. Student debt, spiralling house prices, stagnating wages and zero hours contracts have ruined all the fun. More than 1m Britons now turn 40 with NOTHINGsaved for retirement, according topension provider Zurich. Today, it rocks to be old, at least financially.
Forget me not
I know that investing for retirement is just another demandon your pocket. But if you dont start earlyyouwill squander the one thing in yourfavour: time is on yourside. If you invest 1,000 at age 30 and it grows 5% a year itwill be worth6,081 by age 67. If you invest 1,000at 50 and it grows at the same rate, you will have just 2,292. The first poundyou invest isthe most valuable of all.
So, millennials, prove me wrong. Start investing now. Otherwise, retirement? You can forget it. Sorry.
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