Numbers 8:23-26 And the Lord spoke to Moses, saying, “This applies to the Levites: from twenty-five years old and upward they shall come to do duty in the service of the tent of meeting. And from the age of fifty years they shall withdraw from the duty of the service and serve no more. They minister to their brothers in the tent of meeting by keeping guard, but they shall do no service. Thus shall you do to the Levites in assigning their duties.”
One of the most important pieces of advice about saving for retirement is to simply start now. A pension is the savings you set aside to support yourself later in life. You may have received a pension from your employer (or past employers), and you can also set one up yourself to start saving.
As a people, we progress through life cognisant of the fact that a time will come when we will retire. For some people, the government pension is sufficient to provide a basic level of income. Others may have an opportunity to accumulate wealth without using pension schemes because of their business ventures or other assets. But most people will want to supplement what they have with some form of pension scheme. Many employers also share the view that, while their employees are working, they should be building up an entitlement to a pension when they retire.
Some advantages of having a pension plan:
- Financial safety net – A pension plan acts as a long-term savings fund, and this provides you with a pool of wealth that you can use to increase your financial stability, take care of debt, and manage your expenses.
- Leaving a legacy – Pension schemes can provide protection in the form of lump sums and pensions to dependents in the event of a member’s death. The pay-out from a pension plan can be done in two ways. The first is a monthly payment for the rest of your life that is equivalent to the total amount accumulated over the course of the plan. The second is a lump-sum payment that is paid in full to the policyholder. However, you have the choice of adding your loved ones as your beneficiaries so that they are taken care of if you are not around.
- Tax Relief – To encourage pension schemes, the government provides tax relief on contributions made to pension schemes and the growth in their investments. Pension plans count as tax relief items, and therefore, the money you contribute to a pension plan is free from taxes. That means the wealth you have accumulated in your plan is entirely your own. These benefits extend further when you reach retirement age.
- Compounded interest – Pension plans offer you the benefit of compounded interest rates the earlier you start. This allows you to build up quite a healthy pool of wealth by the time you are ready to retire.
- Policy flexibility – The flexibility of a pension plan allows you to adjust the plan based on your current circumstances. If you are switching jobs, going through a period of unemployment, or would simply like to pause your payments temporarily, you may notify your financial advisor or pension plan provider and have your plan adjusted to fit.
Contains content contribution from Guardian Life Limited