Are you saving enough? Find out right now!
There is a huge problem developing whereby the governments around the world deliberately increase the pensionable age in order to delay paying people their governmental pension benefits. To understand how this problem developed we need to go back in history.
The current pension system is based on the assumption that there will be taxes from five to ten workers to support one pensioner. Up to 1990-2000 that system worked fine as the baby-boom generation (born 1946-1964) formed a wide tax-base to support the pensioners of that time.
In 1961 the anti-pregnancy pill became widely available. The amount of children born dropped significantly and has been dropping ever since in most of the developed world. As a result of this the amount of workers available to support the now ever increasing number of baby-boom generation pensioners has reduced so drastically that in the short-term future it is expected that every two workers will have to support one pensioner.
The first baby-boomers, born in 1945, have started to retire around 2010, when they reached 65 years of age, and this process will continue for the next 20 years! It is fair to say that the problems only just started. The final nail in the coffin of the current pension system as we know it is that today pensioners are living longer than ever due to modern science and healthier lifestyles.
There is a perfect storm developing whereby there are more pensioners living longer than ever before and fewer than ever workers to support their pensions and healthcare costs. No wonder that the governments are trying to come up with ‘solutions’ such as extending the pensionable age, increasing taxes and possibly make pensions means-tested in the future.
At the same time employers prefer to hire young staff instead of ‘old’ and ‘expensive’ 50+ year olds. Yes, that’s right, once you hit 50+ you’re done on the labor market if you lose your job. International Labor Organization data shows that in the West around 40% of the 55-65 age bracket is not working. For the 65+ category that rises to over 80% The government expects you to work until 67, but once you’re over 55 one in two is unable to work and thus unable to contribute to their pensions. If you don’t contribute to your pension for the required amount you will be penalized once you do reach pension age further reducing your income – and government costs.
The solution to all this ‘doom & gloom’ is simply. It is called ‘Look after yourself’. Once you accept the fact that you need to look after your own retirement life becomes a lot easier. First of all from now on you set your own rules. No more dependency on governments whom, as we know, only think 4 years in advance, if you’re lucky, and only care about themselves.
Second benefit is that the money that you set aside for your retirement stays within the family as it will form part of your estate. Why should your pension fund die together with you?
You also set the rules regarding the investment strategy of your plan. This allows you the flexibility to pick exactly those assets you feel comfortable with investing into in order to generate the necessary income level you need.
Flexibility is another major benefit. You set your own rules as to how much you wish to draw down from your fund. Should you need more income for a short period of time or make a large single purchase you can access that money.
Use the below calculator for three different types of calculations:
- You have some money set aside for retirement. How much income can you generate per month for a set number of years
- This calculator is the opposite of #1. You have an idea of the income you need, but would like to know how much your pension fund has to be to support such an income for the time period chosen
- For the last calculator you know the fund size and your desired annual income. The calculator shows how many years your fund will last you
Check out the sections on regular saving products to learn about the solutions that will help you achieve your goals in a comfortable way. We explain how the product work in normal language, show you the key-differences between the common offered products and point out the common mistakes that can cost you thousands of dollars when setting up a plan.