Retirement Investing in Your 20s

As life expectancy continues to increase, planning early can ensure a comfortable retirement; more time for your investment to grow through compound interest

Morningstar News Team 1 September, 2016 | 8:00AM

Is it too early to start planning for retirement in your 20s? The answer is no. As life expectancy continues to increase, planning early can ensure a comfortable retirement. While planning for retirement at this age may be the last thing on your mind, the earlier you start the better chance you have of achieving your retirement goal. An early start also allows more time for your investment to grow through compound interest. In addition to starting early, here are some steps you should consider when planning for retirement in your 20s and early 30s.  

Maximise Your Workplace Pension

Young investors should maximise contributions to their workplace retirement scheme. A Government initiative called auto-enrolment has ruled that all businesses regardless of their size must offer a pension plan by 2018, and automatically enrol their employees.

Your employer will match your contributions in a workplace pension up to a pre-agreed cap, and the Government will top it up with income tax relief – more than doubling your savings every month.

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