Planning for Retirement in Your 30’s
8th November 2019
When you’re in your 30’s there are many demands on your income, especially if you have family commitments. Planning for retirement is easy when you have the right financial adviser. However, there’s the ever so costly mortgage repayments, children’s maintenance and other bills. This can make things difficult, while also trying to save for the education of your children in the future.
How am I supposed to think about starting a pension, when I have all of these commitments?
The 20% Rule
If you start saving aside 20% of your income, you can reap the benefits of income tax relief. Let’s say Brian is 35 years old with a wife, 2 kids and a mortgage. Brian’s income is 35,000 per year.
When Brian decides to put €580 per month towards a pension, at the 40% income tax relief threshold it will cost Brian only €348. Brian’s yearly pension contribution is €6,960, costing him only €4,176.
“Ah sure, I’m only in my 30’s”
When you’re in your 30’s, retiring seems like a lifetime away. All you can think about is managing the next year covering bills, car expenses and nice things. Many people think a pension is something that you start in your late 40’s, but that’s far from true.
If you want your pension plan to cost you less in the long run, the sooner you start is better.
“I’ll just invest some money myself”
Many people have this misconception that using a financial adviser will cost them money. However, this is in fact the opposite. Investing money privately is a high risk move and lacks the discipline of a monthly payment. To put it lightly, investing privately is like walking into a boxing ring with a blindfold on.
If you haven’t started a pension plan yet, you should talk to our pension experts today.
It’s never too early.
Patrick Mc Closkey, Marketing Executive
Consultas Financial Services Limited