Pension funds are still the best way to save for your retirement

It’s hard to ignore the frequent bad news about pension funds in the news, but the reality is that the majority of pension pots are providing futures for millions of people in their retirement and the need for a pension shouldn’t be ignored. In reality pension funds are making the same upward progress as the rest of the stock market, and as contributions continue, so too will the overall climb. It makes no sense at all to give up on pensions when there is still plenty of hope for the future.  It is actually quite refreshing to think that pension funds have not sunk in the economic crisis affecting so much of the world and that in truth the majority of the savers still have their contributions intact.

Pension funds are immune to much of the economic downturn

The reason pension funds are still going strong in the midst of so much gloomy financial news is largely down to the way the fund contributors save.  Because payments are made regularly at the same time each month, the funds grow due to the fact that predictable sums are coming in at predictable times and the benefits average out over the year rather than being subject to the vagaries of investing at highs and lows, as happens with other more risky investments.

Consequently pension funds make sense for savers because they are so steady and not subject to poor timing on the part of fund managers.  As long as the fund managers keep their nerve in challenging times, the savings will not suffer and indeed there are opportunities to but falling stocks which might not have existed before.

Pension funds repay long term commitment

People contributing to a pension should remember that their investments are going to continue over two decades or more and the payoff is designed to happen at the end of a very long period; results do not happen after ten years.  The younger you are, the better it is to start with it and give yourself maximum years in the fund.

Even so, older investors can still make up for lost time by upping their contributions, so there is still hope even if you have passed your twenties some time ago.  Saving for nearly forty years or the equivalent in a pension fund is going to reap benefits which are just not possible with other forms of saving.

How else do your prepare for your retirement?

If you are in any doubt about the value of a pension, consider how else you are preparing for your old age.  When you get to 65, or 70, how else will you have prepared for the expenses that will still present themselves? To put away small amounts now for a brighter future when you need it most makes economic sense, especially when you consider you won’t really miss the money if it is coming straight off at source. Keep your pension fund in review and don’t be afraid to ask pertinent questions if you are concerned, but don’t leave your plans for old age until it’s too late.