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PENSION
The main purpose of your retirement savings is to secure you a
reasonable standard of living after your retirement. In addition,
most of us would also like to be able to afford a little pleasure
now and then.
There are two factors that determine your pension savings: the size
of your regular payments, and the rate of return that your savings
give.
Pension companies often focus solely on the size of the payments,
without giving sufficient attention to the return the savings
provide.
If, for example, you invest your savings so that they achieve an
annual return of more 5%, they will double in 15 years and quadruple
in just 30 years.
It is also important to pay attention to the tax rules, depending on
whether your savings are for a capital or an instalment pension, or
free savings.
Pension contributions represent one of the biggest challenges in
people’s private economy today. The demographic trends, coupled with
increasing longevity, are placing ever greater demands on the
individual's own pension plan.
The consequences of "forgetting" to save for your retirement can be
serious. The state pension is already at a level at which many
pensioners feel they live in a kind of poverty, without being able
to afford a car, a holiday or other luxuries, but just the bare
necessities. Several studies have shown that the vast majority of
people do not save enough. Many fall for the temptation to believe
that if you have a labour market scheme or a company pension, then
you are safe and sound. Unfortunately, this is not always correct.
Employees in the financial sector (banks, savings banks, mortgage
and insurance companies) often have pension schemes under which
about 25% of their salaries go to pension savings. This level has
been determined on the basis of average needs, so in general, you
could say that if you have saved about 25% of your salary for your
pension since starting work, then you are well covered.
However, we are not all average people, so we do not all need to
save up the same amounts. Some people place greater emphasis on
their recreational and leisure possibilities as a pensioner than
others, and therefore also on their need for financial headroom.
At AVO Care, we believe that our customers should carefully consider
the issue of retirement savings. This applies regardless of whether
you can currently afford to make the necessary savings or not.
However, in our experience, changing your type of savings can often
give a higher return without limiting your current level of
disposable income.
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Calculate your current pension at
pensionsinfo.dk.
Click here
to go to the page, enter your own figures, and see the result.
Learn more about:
• Capital savings
• Alternative savings
• Pension
• Tax
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