Pensions are just savings plans that are specifically designed to put money away for retirement. There are various rules about them, which may make them seem very complicated and put many people off them but they can be very valuable.
Do I need a pension?
This is not really the right question. The more important question is how are you going to look after yourself in retirement? What steps have you taken to ensure that maintain your standard of living after you stop working? A pension may or may not be part of the solution. One of the advantages of a pension is that you receive tax relief on the money that you contribute and it goes into a savings scheme that is specifically designed for retirement.
A pension in itself may not guarantee you a comfortable retirement but it is unlikely to hurt your chances. As with most things in life, the solution is not to put all your eggs in one basket. Through saving for your retirement in different ways, you spread the risk and increase your chances over time to achieve your goals.
At ARM Associates, we concentrate on retirement planning rather than pensions. You sometimes need to look at the bigger picture to achieve your goals. Pensions are neither good nor bad; they are just investment tools that are available to you. |
