No Time Like The Present

Starting early costs you less - It pays to get moving on your pension now

You can start saving for retirement at any age, but the earlier you start, the less it will cost you. One of the main reasons people have inadequate income in retirement is that they start saving for retirement too late.

By starting a pension plan early, you have the opportunity to compound investment returns over a greater number of years (e.g. earn interest on your interest), so you can build up a really substantial retirement fund. 

It?s easy to see how it makes sense to start your pension early:

• If a 20 year old puts away 14% of his annual income, he may look forward to a pension equivalent to two thirds of his final earnings.
• But someone who starts saving for retirement at age 40 may have to contribute as much as 34% of their annual earnings to achieve the same retirement income. *

  * Source: Mercers, Feb 2007.

The sooner you start saving into a pension, the better.

* Source: Ark Life Oct 2008. The above figures assume annual investment growth of 6% (less charges) ? which is not guaranteed. The above figures also assume that the monthly contributions are indexing at a rate of 3% per annum, and the customer can claim tax relief at 41%. 

An AIB Financial Adviser can help you

1. Estimate your likely drop in income in retirement if you do nothing
2. Identify what size pension fund you should look to accumulate to replace this lost income.
3. Assess how much you should contribute to build up the desired pension fund.

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