Your retirement is probably a looong way off (sorry) but that means you should start to build up that pot now via defined contributions by your employer.
Are you in your 20s and 30s? Then, like us, you probably associate retirement with some far distant future, where you will finally have that long promised hover board. I mean seriously where is it?
But now is the time to plan for that future, so you can buy the best god-damn hover board in your golden years. A report by Mercer shows that people under 30 are missing out on large amounts for their pension pot by not taking up employers defined contributions.
Almost 70 per cent of employees under the age of 30 in companies that offer a pension scheme are losing out by not securing contributions by their employers to their defined contribution (DC) pension schemes. That adds up to an estimated €80 million of these contributions nationally every year. That’s a lot of cash.
See this video to see what one of Mercer’s own Gen Y employees has to say about this….
It is estimated that missing out on one year of defined contributions costs you about €15,000 a year from your pension pot, so it starts to add up pretty quickly. Check out this infographic for the full breakdown.
It is assumed that affordability is the main reason why employees under 30 aren’t taking full advantage of employer contributions. However, Shauna Rowley a 23-year-old actuary (who stars in the video above and conducted the research) says that the analysis indicated something different.
“What surprised us most was that when we analysed schemes where employees had to opt out of contributing as opposed to opt in, the participation rates went through the roof with 90% plus contributing”.
So laziness, to be blunt, is the reason most of us take part in a defined contribution pension scheme and if one is included in our terms of employment, we usually stick with it.
But if you haven’t taken up a scheme yet we have some good news. Firstly, it is estimated that one in five of us will live to be 100, which is just fantastic. Some of us may live long enough to see Manchester United win something again (joking United fans, joking). That fact also means that we will need a lot of cash to see us through a much longer retirement than previous generations.
The other good news is that it isn’t too late, no matter what your age. The sooner you start, the sooner you start building up that pot, and the closer you are to getting your hands on that deluxe hover board.
Check out Mercer’s Website on www.Mercer.ie
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