Any expert on the subject ofwill undoubtedly tell you that there’s really no such thing as a time too early to start saving. The earlier you start, the more you add to your pot and the more enjoyable your – it’s a pretty simple formula that rarely leads anyone down the wrong path.
That being said however, there are certain considerations that must be factored in during the early years ofsavings which can and should influence when, where and how much you start saving. For example, chances are you’ll be wanting to get those personal debts, student loans and other commitments paid off as quickly as possible. After all, entering retirement with a decent pot is one thing, but it’s slightly less desirable if you do so with a hefty still to pay off.
Which leads to the obvious question of how should anyone looking to better their long-term interests prioritise their savings and finances, in order to give them the best shot at a happy and secure retirement?
Consider Your Position
Well, in order to map out the most appropriate long-term plan for either yourself or you and your partner, you first need to think about your financial position right now.
For example, if you are currently employed and have the intention of staying with this company or business for some time to come, it’s more than worth joining the scheme wherein the company matches your pension contributions. If you don’t, you’re doing little other than refusing a generous chunk of free money.
In terms of debts, generally speaking it is always advisable to pay off all outstanding debts (to the largest possible extent) before then turning your attention to pension contributions and investments. The reason being that it’s rare to find a pension orscheme that pays you a higher rate of interest than you will be paying out while your loans and debts are active. So no matter what age you happen to be, paying debts off as quickly as possible generally makes sense.
One other golden rule to follow is that of having at least three to six months’ salary in some kind of immediately accessible fund or account which can be called upon in the case of an emergency. After all, it’s one thing to have your money invested in a solid pension, but not if this means you run the risk of being high and dry.
Tick the Boxes, Then Start Saving
So in terms of when the best time is to start saving for a pension, the simple answer is any time you’re able to tick all of the above boxes or at least be well on the road to doing so. If you are in a genuinely strong financial position and your debts are of no real problem to you, there’s really no such thing as starting too early.
If unsure, make an appointment with an independent financial advisor to help you go over what’s coming in, what’s going out and what you can realistically afford to begin putting away and when. Even just a little extra on a monthly basis can add up to a huge difference, so it’s worth knowing what your options are even if you aren’t yet ready to make a decision.