Have you considered how much you need when you retire?
For many of us, retirement saving is overshadowed by more pressing day to day needs and so we often place it in the back of our minds and think we will consider it later. Saving for your retirement can seem too far away, however, pensions are deliberately designed as long-term savings to secure your future and there is therefore no better time to start than the present.
Spending a little bit of time pension planning can make a huge difference to your future and security. For many people, using a pension calculator is the first step towards understanding what they already have invested and how much they will need to save over time.
The Clearer Picture
A pension calculator can help estimate retirement income and therefore provide a clearer picture of what to expect in retirement. Adjusting minor changes in the pension calculator fields, such as how much you expect to save each month or how long you expect to work, can demonstrate the vast difference that small contributions can make.
Using a pension calculator can also be a wake-up call for some savers who have been lax in their retirement savings. This is because seeing your potential retirement income in black and white can have a motivating effect and depict what seems to be a faraway concept into a consideration which is actually looming quite quickly.
Remembering That Calculators Are Just The First Step
It is important to remember that pension calculators can only provide you with an estimate of how much your pension will support you in retirement. This is meant to be a guide for savers who may learn that they are putting £100 away each month when they really need to be saving closer to £200 per month in order to reach their ideal retirement income. Since these types of calculators can only be used as a guide, your eventual retirement income could be less or potentially more than what you initially predicted. It is always important to also consider other tools, such as investment performance indicators and counsel from an independent financial advisor in conjunction with your own research to place you in the best position for your future.
Get a Head Start
It is important to begin to considering your pension as early as possible. Pension savers should be sure to take inflation into account, as well as unforeseen expenses such as home or car repairs. Once armed with this information, a pension calculator can help you better understand whether you are doing enough for a comfortable retirement, or whether you need to adjust your contributions while you still have time.
Nadia Narayan of www.pensioncalculator.org believes that it is important to start to save early for your pension to assist in having a secure and comfortable retirement. She advises that using a pension calculator gives you a foundation to know what you should expect to save for your future.