Why a pension is so important to you

Pensions are your lifeline during retirement.

09:27 16 June 2013

A lot of people, particularly younger people, do not pay attention to saving money for retirement. Most of them may think their golden years are a little way off, or that it seems they will never come.

Well, this mentality could cost money. Unless you start putting into a pension account, you’re not helping to make your retirement years more comfortable.

Pension schemes have two specific stages. The first one is the saving part where you put as much money as possible into a pension account while you’re still working. After you’ve saved substantial amount of money, you can think about investing them. Some of your options are stock trading and mutual funds.

Stage 2 will come after you retire. This is where you use the money you’ve saved through the years so you’ll get income even after your stopped working. One option is to buy annuity that will give you monthly paychecks for the rest of your life.

Keep in mind that the amount that you’re going to get will depend on the amount that you’ve saved. If you’re looking forward to travelling around the world once you hit retirement, you will need to save more money while you’re working.