Advice on retirement savings?

Question

I am in my mid 20s and getting things sorted with regard to retirement savings, but would like to know a few more things before I embark on any other schemes:

* Is it worth starting a pension now?

* Will there be pensions in 40-odd years time?

* If pensions are worthwhile, which private schemes are a good idea?

* Which high-interest savings accounts are a good idea (I already have an ING Direct account)?

Thank you for your advice.....

Answer 1

I found that getting a personal pension is more beneficial for me long-term than a high-interest savings account.  If you are paying Income Tax on earnings, whoever you save through can claim back Tax on your contributions.  With the change in tax rates in the UK, I'm not sure whether it has changed in accordance with it, but...

- If you were to make monthly contributions of £39 per month, the pension provider would be able to reclaim £11 Income Tax you paid on that money.  This may have changed to every £40 contributed, they can claim back £10 Income Tax.

Even with the volatility of the markets currently, if your fund was to lose 5% of it's value, you would still be UP about 15% from your original contributions.

Whichever way you go, it's best to have some back-up in case of emergency so a combination of savings and pension may well be something to consider.  Everybody has different needs so find someone who you can to approach detailing your personal circumstances.

Answer 2

do you own your own company?  Are you looking to set up your own plan?  I would consider establishing a 401k, simple or sep before a pension.

If not, do you have a 401k at your current employer?  Are you maxing this out?  Are you contributing to a ROTH IRA?

With less that 9% of all companies still providing a pension, they are far and few between.  

If you have your own company, remember that pensions are a liability on your balance sheet, this is one reason why companies are getting rid of them quickly.

I have an ING account too... there are some higher rates currently, but they are ok on theirs.  bankrate.com lists most rates.

hope this helps.

Answer 3

Check out: http://www.gmacbank.com/

for high interest, FDIC insured & free ATM drafts.

======================================...

The earlier you start a pension plan.... the better.

Banks and insurance companies are the worst place for investments.

If you want to pay high fees but get great advice;

Edward Jones

If you want low cost, good product;

Charles Schwab

Fidelity investments

T. Rowe Price

Vanguard

This is the best thing you can do for your future. Do it now.

read;

Mutual Funds For Dummy's

& other retirement investment books.

It's not that hard..... just takes a little time and effort.

Answer 4

1) Yes.

2) Possibly.

3) I don't know.

4) None.

Answer 5

"We recommend the earlier the better," says Legal & General's pensions marketing manager, Andy Agar. "If you are in your 40s it is almost too late."

Legal & General, which expects to be one of the main providers of the new stakeholder pensions, says a 25-year-old, could expect a £12,000 annual pension for a contribution of £100 a month aged 60.

The cost of extra premiums needed to achieve this at a later age soon mounts up. A 40-year-old, for example, would need to pay an extra £214 and a 50-year-old would be paying an extra £800 a month.