Retirement planning can sound really dull and we may not really want to think about even doing it. The thought of putting some money away for retirement and not having it available to spend now can also be off-putting. However, we are often told that we should start planning from a really young age and there are people who get to around the age of fifty and suddenly worry about how they will manage in retirement. It can therefore be hard to know exactly when to start.
There are some people that say that you should start saving for retirement as soon as you are born. There are recommendations that parents start putting some money aside for children right away. They suggest that parents make regular payments into an account which has compound interest and then that children continue adding to this once parents are no longer responsible for them. Of course, the more that is put in, the greater the fund will be when they reach retirement age. This may seem a bit extreme for some people and it relies on children continuing to pay in as they get older, which they may not do or may not be able to do. It also relies on parents being able to afford to do it as well.
As Soon as you Start Work
It might be better to start saving towards retirement as soon as you start work. These days, most employers offer a pension scheme and these can be worth signing up for as the employer will contribute towards them as well as the employee. You also do not pay tax on the money put into the pension, it gets taken out before PAYE is calculated on your salary, so you gain there as well. It can be tricky putting money away at this time though. You are likely to have a low salary, you might be repaying a student loan, there is a chance you are paying rent or even starting a relationship or a family and these costs could mean that you will not have any free money to pay towards a pension.
As Soon as Possible
You therefore might wait until you feel you have enough money before you start paying in. While this seems sensible it could be the case that you will find that you never have enough money because there are always things that need to be bought through your working life. Therefore, it is a good idea to consider thinking about whether you should try to budget really hard so that you can make the payments into a pension, even if it is just a small amount.
Later in Life When you have more Money
It could be the case that it will not be until you are older that you will have more money available. Once your children have left home and you have had promotions and your salary has increased then you will have more money available to put towards your retirement. However, leaving things this late can be risky because you may find that you do not have enough time to accumulate enough money to give yourself a decent retirement income. Make sure that you think hard about this when you are young and even if you are only putting away a small amount of money, it will all add up and help in the long run. Of course, it might be too late if you are already older. If this is the case do not give up, put aside as much money as you can and you will still have a chance to build up a decent sum for retirement but just not as much as you would if you started at a younger age.