Above all, the youngest tend to perceive their retirement time very far off. However, we should not underestimate the savings for this time. Without a doubt, it is a mistake to leave the saving process for later, since it is much easier to save little by little and gradually and calmly. In this way, we will build an economic cushion that will make the time of our retirement more bearable, especially taking into account that the retirement money box is in danger.
In this sense, there are different products on the market that allow us to save for this moment. This is the case of pension plans, Retirement insurance, Life insurances o Savings insurance. However, if we want to save for the future using any of these products, it is best to have the experience of Insurance consultancies, such is the case of Euroteide Insurance. Euroteide Seguros is a Tenerife Insurance Advisory who will put at your disposal its extensive experience in the sector to find the savings product that best suits you.
When to start saving for retirement
Ideally, you should start saving for retirement from when you enter the labor market and continue with the savings process until retirement. Thus, the ideal is that the time horizon for saving for professional retirement is 30 or 40 years.
Although it may seem like a long time, we must not make the mistake of putting off saving for our retirement until later, since postponing this has a significant cost. Specifically, if we postpone saving, two things will happen:
- The effort should be greater the longer we postpone saving. Thus, to get the same money saved, we will have to make a greater financial effort the later we start with this process.
- If no such financial effort can be made, we will reach retirement with a much smaller mattress. This may not be a problem, but it may happen that it is insufficient to have the standard of living that we want.
Undoubtedly, the best way to establish capital that allows us to lead a good standard of living after retirement is to start saving as soon as possible. In addition, it is best to save through regular and constant contributions.
How much should you save according to your age
There is no universal answer, but it is necessary to take into account our lifestyle. In this way, the savings that we will need for our retirement will not only depend on our age, but also on our possibilities and the pace or standard of life that we lead or want to lead once retired.
In any case, we must bear in mind that we will need between 70 and 90% of our annual income to live each year after retirement. This means that if you receive an annual salary of 48.000 euros, you will need between 30.000 and 42.000 euros a year after you retire. Thus, if you retire at the age of 65 and live to be 85, you will need between € 600 and € 000. They are truly large numbers. Nevertheless, they are not impossible to achieve with the 15% norm.
The 15% rule
According to numerous studies, the ideal between 25 —Age at which the labor market is entered— and the 67 years —Age at which we retired— We will have to contribute around 15% of our gross salary to a pension fund or any other savings product for retirement.
Following this rule, it is relatively easy to continue after your professional retirement with the same rhythm of life that you led before you retired.
How to save for your retirement: the best options
There are many savings products designed to provide a good cushion for our retirement. In fact, there is such a variety on the market that the ideal is to get good advice and information, so that we can save comfortably and that the chosen savings product is perfectly adapted to us and to our needs and circumstances. In any case, the most contracted savings products in our country are the following:
- Pension schemes: it is one of the most contracted banking products in our country to save for our retirement. With the pension plan, periodic contributions are made, so that, when the time comes, the retirement pension received from Social Security can be supplemented. This product has important tax benefits, although the money will not be accessible until the retirement date arrives.
- PIAS or Individual Savings Plan: Through the PIAS, flexible periodic contributions are made, so that the owner of this product to generate capital for retirement, in addition to generating a certain return derived from the linked investment. The holder may partially or totally redeem the capital saved. In addition, it has important tax benefits, as long as at least 5 years have elapsed since the first contribution was made.
- SIALP or Individual Long-Term Savings Insurance: SIALPs allow you to save capital for the future that will have a certain profitability, which will depend on the guaranteed interest. In this case, the holder may only redeem the entire capital. It also has tax advantages, but as with PIAS, 5 years must have passed since the first contribution.
Without a doubt, savings products for our retirement are indispensable. In addition, it is important to think about saving for our retirement as soon as we enter the labor market, no matter how young we are. In the market there are a multitude of savings products, from pension plans, to savings insurance and life insurance savings. To choose the product that best suits us, it is best to have the guidance of experts in this sector.
En Euroteide Insurance, an insurance consultancy from the south of Tenerife, we have more than 25 years of extensive experience helping to plan the savings of many people on the island and abroad in different savings and investment products, from the most conservative products to those that carry risk, We are sure which products to recommend and which one best suits you to save for your professional retirement.