A common concern among today’s youth is whether or not they’re saving enough for their retirement. Do you have an employer who matches your contributions to a pension plan?
And have you been regularly contributing to it? If so, you’re already miles ahead of many other 30-somethings who haven’t yet started contributing to a pension.
Many of today’s young professionals are self-employed, and organizing a pension plan is much more difficult for them. Retirement might be a long way away, but you’re going to be in a tough spot if you wait too long to start saving for it. Here are some other common pension mistakes.
1. Being an Inactive Contributor to Your Pension Fund
Some people seem fine with the idea that a certain percentage of their pay automatically gets put into a pension. They don’t think about it ever again.
It might as well be a gym membership. In reality, it’s an expensive mistake to ignore your pension and let it be so automatic. Instead, be an active contributor.
John, an executive at Smart Pension, agrees that keeping track of your pension is important. “Check your bank balance often, and check your pension balance often,” he says. “Always keep yourself on track, and brainstorm ideas to increase your pension while you actively look over the numbers from the past year or so.”
I’m sure you’d increase your contributions if you knew how much you actually needed to save. But that would require you taking the time to figure out the math for yourself with regards to how much you need and when.
If investments are involved, it’s a mistake not to actively check on them and see how your funds are performing. If you aren’t actively involved in your pension, it could cost you a bunch of money.
2. Failing to Understand Your Workplace Pension
Many employees opt in or automatically join their employer’s workplace pension plan at what they think is the standard rate.
You might think that a certain percentage of your pay is being put into a pension plan. You might think your employer is matching it—that this is the norm. However, it might be worth your while to speak to HR about your options.
You might find out that if you increase your contribution, your company will actually raise its contribution and match the new, increased amount.
The workplace pension plan is one of the best employee benefits you can get. Failing to look into the nature of your pension is basically you turning down more free money from your employer.
3. Not Knowing the Fees Attached to Your Retirement Accounts
When you pay high annual fees on the funds in your pension account, the costs add up and work against you. So if you have an opportunity to choose a route that comes with a fee that’s even 1% less, take it.
There are low-fee mutual funds into which you could invest your retirement contributions. Low-fee options are worth exploring because, over time, those small fees add up tremendously.
4. Relying on your Property Assets to Help You in Your Retirement
If you’re asset-rich in the form of a nice home that you’ve invested in, don’t assume it will translate to you one day being cash-rich if you sell it.
The property market isn’t the safest bet on which to rely. You might end up in a position where you do not want to or cannot sell your property.
5. Not Understanding the Tax Breaks That Come With Having a Pension
The government encourages you to save for your retirement by giving you a tax break if you contribute to a pension.
Tax relief from the government can reduce what you owe them each year, and also increases your pension fund.
You’ll likely get a contribution to your pension from the government as a tax break. Some of your money that would have gone to the government as income tax goes into your pension instead.
Your employer takes your pension contribution and the government’s contribution as tax relief from your pay before deducting tax from your paycheck.
Educate yourself about tax thresholds as well. If you can figure out a way to earn below a certain threshold, you can get an even bigger tax break and save a ton of money in the long run.
Your individual earnings and circumstances do affect how much you get back from the government, so it’s important to educate yourself in order to avoid costly mistakes.
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Your Post was very informative. I need it this type of article for my knowledge. Thanks for sharing
Thanks for the key advice. Pensions can be complicated and having a clear understanding of the financial implications at each part of the process is critical.
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You are right. We need to educate our self as much as we can. This post can be told as the increasing my knowledge. Thank you such valuable information. Keep it up.
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Very informative – I didn’t know about potential tax breaks that come with pensions. Thanks so much for sharing!
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The information is very valuable as it educates about the need for employment and self earn, also about the value of money. Keep sharing valuable thoughts…
Informative post, we all need to know these, Can you write about how to start a secure business with pension’s money?
Thanks for shaing this valuable Information
We all need to focus on these mistakes
You are right, its necessary to educate ourselves. Some years of funding could bring more than what we expect in our old time. I will also recommend my elders about this. Really helpful article.
I don’t currently have a pension seeing life insurance as more of a priority with 2 small children. Maybe looking into a pension is the next step for me.
Thanks for sharing this information. This will help me to plan my pension in a better way.
I totally agree I am 42with no pension because I thought I did not need one when I was younger and now I just can’t see the point. Need to sort things out as TV aerial installing is not going to be around much longer now that 5G is getting rolled out in Leeds.
Don’t feel bad, Gary. I had a full corporate pension, but was 2 years short of 25 years when they decided the CEO and board deserved our pensions more than we did. In spite of it being illegal at the time, and our having the promises in writing every single year, *poof*
We sure have hosed up how life should be. Working yourself too hard in hopes of a retirement someday is a stupid way to live. And if we had real relationships, no one would need a pension because their communities would happily support them in their old age.
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Thank you for the article, Kumar. Thinking about the idea of getting old without any meaningful income makes some grey hairs from time to time. I’m in my midthirties and it’s time to evaluate such things. very usefull information
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good job sir, Every working person should go through this post.
Thanks for sharing. tech news & technical tips
Besides a pension, has anyone heard of a SEP IRA? This is another great tool that I use to help Golden Financial employees and myself, as a business owner.
Hi,
Wow, incredible blog writing. I have read this full article, it’s really amazing, informative.
Cheers,
Mark person
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I think the most common problem is not saving for your old days. Here starts the problem…
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What is benefit of tracking pension contribution actively?
can you suggest me that how to plan invest my pension? I currently choose automatic choice Can I change it later?
It’s different from time to time and country to country. We are getting old without any huge income makes some grey hairs from time to time.
Amazing Article And Also Writing Style is a Very Good.
I will share this with friend right away
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Great article. I think that most people don’t participate in a pension plan at their place of business due to a lack of understanding and knowing all the facts such as fees and such. Your article brings so light to the subject,
Hi Ahmad,
The list is pretty interesting and also useful. However i think most people fail to understand the workplace pension…
I extremely agreed with your all pension failure points. No-doubts same mistakes are happening in pension system.
But i also want to add a point. Recently a lot of pension accounts was going on and their amounts was receive by the high authority person. He was receiving illegally. Because dead persons were those people, they have no close relatives for pension receiving. That’s why a corrupt high authority was receiving pension amount on the behalf of that dead people. Approximately, 200+ pension accounts were running in the same way. Which is very serious condition behind the bad governance for any country.
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Saving money and investing it in the right area is a very important thing. We should start it as early as possible in our life.
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Your individual earnings and circumstances do affect how much you get back from the government, so it’s important to educate yourself in order to avoid costly mistakes. Very right. Thanks a lot for sharing. Very interesting to read. Thank you for sharing information.
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Do you have an employer who matches your contributions to a pension plan?No I think!
Thanks
We all must save for our old age.
I appreciate your information. It was very informative to the people for their future.
I almost read this article 4 times, every time I learn something from it.
Thank you so much admin.
Hello!
I currently put aside 15% and my work matches 3%. What do you recommend for knowing whether that will be enough?
Thanks!
Hi
Sir Ahmad,
Very Informative article about 5 expensive pension mistakes. You are described very important pension mistakes. Thank you for sharing this article.
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Hello Ahmad, thanks for sharing this most interesting and informative article about the most expensive pension mistakes that are common in today’s world. Keep it up!
Thank you for the article, Kumar. Thinking about the idea of getting old without any meaningful income makes some grey hairs from time to time. I’m in my midthirties and it’s time to evaluate such things.
continuous contribution in the pension fund is definitely essential. Thanks for sharing and this should definitely be considered
My father is a retired man, so for his expensive pension is enough. This post so helpful, everybody should know, I will share this article.
This post explains why continuous contribution in the pension fund account is important for us and how to maintain this process. This information is very useful for every human being because after some years of funding this amount will be very large and more than our expectations. Thanks for making this post social.
Great article. I was just talking about Pensions with my daughter I am going to share this with her.
Thanks
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Thank you for the great post. keep it up. I will share this with friend right away
Thanks for writing this article, a few years back i lost 40K, in my Workplace Pension, the worst decision of my life. I wish this article was available back in 2015! Great article and i look forward to reading more of your great writing.
Very nice information for future planning we will be secured by following your article. Thanks so much.
Thank you for the article, Kumar. Thinking about the idea of getting old without any meaningful income makes some grey hairs from time to time. I’m in my midthirties and it’s time to evaluate such things.
Great Information, the benefits will enable you in future when you to will be old. we should spare some cash to secure our future…so it is important to every person to protect ourselfs
Good Infos, the pension will help you in future when you will be old. we should save some money to secure our future
This is life saving we should save money for old age and your article is very nice i really enjoy these tips 🙂
Great post ahmed, really i realized my expensive mistakes, now i can rectify and save money.
Thanks for sharing.
Thinking is role a major part in our life. if we are establish our thinking then we able to be a better himself in our society..
Thanks for Sharing this article…… its very interesting and helpful article..
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This is good education and i think all need this type education to can save their money.
I lost a lot of money in business without any plan, after years i understand business plan really is need to start any business.
Thank you for your sharing.
Viswanatha saraswathi .. Great post. It really helps the people to save their money. thanks for sharing
Ahmad,
Thanks for sharing this, one of my common pension mistakes was definitely not to understand it properly. This article really helped me understand what I am looking for to learn on when I retire later. Thank you.
This was so Educating …This what a lot of people need to know.
Thanks for sharing a lot of great information with us. I will share it with one of my friends. They will realy need it.
Thanks a lot! It really helped my brother. I do have a question though regarding tip no’ 4. He has a big house that worth a lot of moeny, but he doesnt know if he should sell it now or later. The issue is that value can go up and can go down. What should he do about it?
Thank you for such a nice article that you’ve shared with us. Saving money for yourself is not as easy as it seems to be.
Ultimately, after spending many hours on the internet at last we’ve uncovored somebody that surely does know what they are. Thanks you for sharing wonderful article. Great post. I will be your regular visitor.
Hi Ahmad,
These are important things you have shared and Every working person should go through this post.
Thanks for sharing.
Have a good week ahead.
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Your individual earnings and circumstances do affect how much you get back from the government, so it’s important to educate yourself in order to avoid costly mistakes. Very right. Thanks a lot for sharing. Very interesting to read.
This was so Educating …This what a lot of people need to know.
I will share this with friend right away
Hi Ahmad,
Your post about highlighting the need for self employed professionals to start saving keeping an eye of the retirement time is worth pondering.
Yes, we need to be cautious and careful about how our savings need to be started to enjoy an old age life which is away from tensions and money related issues.
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