Saving for retirement is a bit like the storyline of 13 going on 30. You start out thinking you have all the time in the world but then, through a sequence of unexpected, voodoo-induced events, you wake up in your thirties and realise you have exactly zero dollars in your pension (okay okay… maybe it’s not EXACTLY like the plotline of 13 going on 30, but still).
As the fun loving twenty-somethings that we are, we tend to rest on our laurels slightly too much. Retirement? Centuries away! Why not sip on a Cappuccino and do some shopping whilst you’re waiting? Sadly, retirement is far closer than we all think, and the importance of saving for retirement as early as possible is paramount.
According to this gorgeous infographic by Icount, out of the 1000 people between 18 and 25 who participated in their survey, 48% voted that people should start saving for their retirement in their twenties. But based on the information in the survey, the average age people actually START saving is in their thirties.
I think that the fair conclusion here is that people love putting off saving, and don’t seem to think that having a pension is sexy. I would counter, however, that it is one of the sexiest things we can do for ourselves. Let’s take an aspiring girlboss who’s just turned 23, is doing rather well and has just started paying in towards her pension to provide herself with a potential windfall somewhere along the line. What’s not to like?
Paying into a pension means that you are smart, forward thinking, and strategic with your finances. And let me ask you this: did Michelle Obama get to where she is today by ignoring her finances and pretending they didn’t exist? I think not.
If that wasn’t reason enough, here’s why you should start saving for retirement as early as possible:
1. It’s closer than you think
You may not like to think so, but if you’ve just turned 20-something, Pension O’Clock has struck. Nobody likes thinking about what may happen in 40 years time, but think of it this way: even if you don’t use your pension money for your actual pension, it could provide just the lump sum you need when you’re in your late twenties and starting to think about buying a house! The earlier you start saving, the better.
2. Stick to your guns
Many people start their working careers with thoughts of ‘being responsible’ and finally learning to manage their finances, only to forget these plans for more immediate worries, like not owning the latest ‘It bag’ or treating yourself to a spontaneous champagne tea. Although It bags and champagne tea are undeniably important pillars of life, try to stick to your resolve. Set up a standing order and starting paying into your pension. Future you will thank you.
3. This does affect you!
You may be tempted to think that this all pension brouhaha doesn’t involve you- none of your friends or colleagues have ever spoken to you about their pension plans, so maybe they’re riding out the wave as well! Yet, out of the London based participants, 46% said that people should start saving towards their pensions between the ages of 20 and 29. Time to hit up that bank account? I think so.
4. Twenty is the new thirty
Okay so, slight twist of the phrase “Thirty is the new twenty” but in this case, it’s totally valid. People often see their thirties as the time ‘when they truly grow up’ and their twenties as a sandwich decade, a kind of neverland where nobody grows old and everyone can still pull off outdated slang words like ‘totes’ and ‘soz’ (ironically, of course). Yet, what we’re all beginning to realise is that your twenties are prime time for you to grow your net worth. The earlier you start, the more time you’re giving your pension to grow and flourish, amassing you money, security, and a higher possibility of one day living on a tropical island.