Whether you have just finished university, are entering the middle years of your life, or are preparing to retire, it is important that you keep a keen eye on your pension investment, and knowing how and when you should be making appropriate moves will help you to plan ahead. Although it isn’t vital that you start saving for a pension when you turn 20, there is certainly no harm in doing so, and while some people in their 50s still enjoy a degree of risk in their investment, most will be risk averse.
20s
You should start repaying debts accrued while at university or during your early working life as soon as possible. Start by repaying high-interest debts like credit cards, but do take advantage of pension schemes with employer contributions. With 40 years or more to accumulate and grow, the money you save in your 20s can really set you on your way, but clearing debt first is important.
30s
Make sure debts are paid off where possible, try to ensure that you have the best deal on your mortgage and other outgoings, and look at any ISAs and other accounts to ensure that you are on the best deal possible. Continue to benefit from employer contributions and try to save more, if possible. Don’t be afraid of some risk at this stage – there is an adage that shares outperform savings accounts in the long run.
40s
You should have already started saving for retirement by now, but it is still possible to ensure that you will have a good retirement even if you are only just ready to start a pension. With your earnings reaching a peak, dedicate more to your pension investment, and research wealth management if you are fortunate enough to have a sizeable investment fund.
50s
Go all out to ensure that you are maximizing your pension investment when in your 50s. Consider what age you want to retire at, use this as a guide, and start to minimise risk in your investments. Losing everything, or losing a sizeable chunk of your pension investment fund now could prove devastating, and it could seriously hamper your plans to retire in the coming years. Try to work towards ensuring that your finances are fully in order, too.
60s
Be prepared to take financial advice at this stage, and to consider the various options that await you when you retire. An unsecured pension may provide you with greater benefits compare to buying an annuity, although it will require more work. If you haven’t quite reached the level of pension that you want, then it may be possible to carry on working for an extra few years in order to give your pension pot one final boost.
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