No one will take care of the pension better than the person himself. Often, social security does not even allow you to survive from month to month. Therefore, it is imperative to think about the future now, which is not so simple. The question of how to save for retirement on your own is asked by many people.
Why should I do it myself?
The amounts that everyone pays monthly for social security from their salary, in fact, are not any insurance premiums. This is a large tax that finances the pensions of current retirees. Thus, none of the funds that are deducted from Social Security wages are put towards a specific person's future pension.
Probably everyone knows that part of his money goes to the Pension Fund of the Russian Federation, whose funds today are mainly transferred to off-budget funds. According to some, politicians have an eye on the remaining savings accumulated in the funds, so you can expect that a person will not receive a penny from his contributions.
There are fewer and fewer people working in private businesses, so fewer people are paying Social Security premiums. This trend leads to the fact that the classic financial pyramid called pension contributions will collapse sooner or later. This will happen when politicians finally declare its insolvency. Of course, it will not look like the president will come out and say that the PF is bankrupt. No, no and NO. He will come out and say that today a fair pension for everyone is 1,000 rubles (except for politicians, officials and other influential groups).
While politicians are trying to prolong the agony of pension provision by introducing innovations and raising taxes, including contributions to the social security administration, through artificial oppression of the average wage in the Russian Federation and hidden inflation. For these reasons, the question of how to save for retirement yourself is important to ask.
How much do you need to save to have a decent pension?
Saving on your own is not an easy task at all. Most people don't know how to save, and even those who do can save too little. Saving despite high taxes, prices that are disproportionate to earnings, is difficult. The fact that prices are rising is not surprising - taxation is still high, for example, taxes per liter of gasoline are more than 53% (VAT, fuel surcharges, excise tax). The situation is slightly better for other products and services.
Before you save up for retirement in Russia, you should decide how much you need to regularly save fromsalary.
If you put aside 10% of your salary, and ensure savings on bank deposits and savings accounts, this picture will come out. For 35 years of life under this regime, the savings will be 2.5% per year. The inflation rate during this period will be 2%.
As the diagram shows, having retired at the age of 65, such a person will live 5 times poorer than he wanted. This means that he will live in total poverty, because the amount received is hardly enough for him to eat. To live in retirement the way you want, you will have to save 50-55%, which is unrealistic with the current taxation.
The only salvation for such a person is to work until old age, at least 2-3 days a week, which has its advantages. Scientific studies show that people who work after they reach retirement age are less likely to develop dementia and Alzheimer's disease, and their mental he alth is statistically better due to socializing with other people.
The resourceful Russian always comes up with something. He could, for example, eventually emigrate to France or Germany, where social benefits will be 3-4 times higher than in Russia.
To understand how much you need to save for retirement, consider the example of another person, but with a completely different attitude to life and work. He is going to save 10% of his salary for retirement.
His grandparents lived a long time, up to 80-90 years old, and he predicts that he will live to be 95 years old, especially if taken care ofyourself and invest in your he alth. This is an ambitious and hardworking person, so it is safe to assume that his salary will grow by 3% per year, although this is a very optimistic assumption. He takes care of his savings - he always uses the best bank deposits, and invests part of his funds. It can be assumed that he will be able to increase his savings by 3% per annum. The inflation rate during the economy period will be 2%. In his old age, he can sell his apartment. Instead, he will buy housing 35% smaller in area.
To live well in retirement the way he wants, he will have to save 35% of his salary throughout his life. He is getting married and will think of a child, which will be a great spiritual and financial support for him in retirement. Such a person, as you might imagine, would be nice to live in retirement and not particularly worry. His character indicates that he has a chance of great success in his career and, consequently, more earnings than at present. He will ask himself in time how to save up for retirement.
How to delay
First of all, you need to rinse your face with cold water and answer yourself at what level you want to live in retirement. Then you should calculate how much capital you need to have in adulthood in order to live comfortably in retirement. The last element is the calculation of how much you need to constantly save in order to provide a sufficient amount.
Regularly and safely
Those who are wondering how much money to save for retirement should start saving regularly and safely with the help of the bestbank deposits and savings accounts. If a person is not enterprising, investments are more risky for him. It is optimal that they do not exceed 20% of your accumulated capital. In this case, it will take 25 years to live in this mode.
Create high value assets
If one is entrepreneurial, the best way to retire is to build assets of high value, such as a company that can be partially cashed out or receive passive income in retirement from dividends while on the board of directors.
If a person has a great talent and passion, for example, he sings and composes well, you can provide yourself with passive income. This is the perfect answer to the question of how to save for retirement. Passive income can be patents or one-off sales of your discoveries.
Never invest in something you don't understand
It is best to avoid investing in assets unless it is clear how to assess the risks and what the profit depends on. Of course, many people are known to invest in theoretically risky assets, such as US or German stocks. American innovative companies will be making big profits around the world for decades to come, so it's worth seizing the momentum of their growth in value.
Pay low taxes
If it is possible to legally pay less taxes, it is imperative to do everything possible to make it so. Money from politicians and officials will never be returned. They will not go to the pension of a specific person, but to current pensioners.
Don't be afraid of risk when you are young
If a person is young, ambitious and insanely hardworking, do not be afraid of risk. The overwhelming majority of people who earn high incomes are smart and enterprising. You may even be able to build your own business, generating tangible income. Perhaps a sports career is something in which a person will achieve great success. This is another answer to the question of how to save for retirement.
Work as long as possible
It is necessary to work until old age, not necessarily full-time. Work counteracts the development of dementia, which is scientifically proven. Retirement at age 60-65 is brain suicide.
Take care of your body
Those who are thinking about how much money to save for retirement should think about this side of the issue. Large amounts in the future may take away he alth problems. Take care of yourself by eating he althy and exercising regularly. It is best to start a family, because it will be a great support in old age.
What should be a good retirement plan?
Security of pension savings is put in the first place. A few years of savings is a very long period in which a lot of good and bad things can happen not only in the life of a particular person, but also in the situation in the financial markets, which will certainly affect the state of the financial institution chosen by the person. And for those who wondered how many points to accumulate for retirement, you should keep this point in mind.
For this reason, inthe plan needs flexibility. First, it should be in terms of placing deposits. Experts recommend setting aside at least 10% of your net income. The amount of savings will change during the savings period. It is necessary to be able to freely change the amounts received on the accounts of those who are thinking about how to save for retirement. It is worth preparing in advance for a situation in which it will not be possible to save the required amount.
Secondly, the plan must take into account the very volatile situation in the financial markets. There are periods in which a person achieves results in the stock markets, and in other periods the highest returns are insufficient. The period that remains until retirement will also change. It also affects the way you save. This factor should also be taken into account in the pension plan.
Best savings practices
What should be the ideal way to save money? The return on bank deposits rarely exceeds the rate of inflation, and the return on the plan is required at the level of average wage growth, which is a few percent above the rate of inflation. The possibility of achieving such a return on a bank deposit is very low.
Typically, a contract is entered into with a bank for arbitrarily chosen amounts, but the bank will offer minimal flexibility when it comes to how the contract is concluded. It will either be a fixed rate agreement, which is more beneficial if inflation is falling, or a variable rate agreement, which is better suited to a rising inflation scenario.
Deposit agreementis concluded for a specified period. Breaking the contract ahead of time, a person loses interest. If you save money in bank deposits every month, it will not be a very convenient form of saving for retirement.
The next answer to the question of how much to save for retirement should be considered in terms of using open-ended investment funds. These are separate companies, the participants of which do not bear the risk of bankruptcy, but the person bears certain risks of an investment nature.
Long-term equity fund returns could well outpace wage growth.
About 8% of Russians invest in the real estate market. Despite the fact that construction projects are considered a very safe industry for investment, here the risks are primarily associated with the developer. A person may be afraid that the developer will not fulfill the contract and the investor will buy, for example, mortgaged real estate. Long-term returns on real estate investments can be high, even above wage growth rates. There is a relatively wide choice in object attachments. The sale period can take several months. Due to the very high cost of real estate, this type of plan is only suitable for individuals who have already accumulated a large enough capital to finance a pension.
The above analysis of the most popular forms of savings clearly indicates that an investment fund would be the best form.
The terms of our private pension plan should be like thisarranged to allow continuous monitoring of the result, and there was also the option of refusing the services of the company with zero losses if it turns out that the plan drawn up by the company does not meet expectations.
Very different situations are possible in life, there is a risk of a big financial crisis. A private pension plan should also be assessed for ways to cope with such difficult life moments. In such a situation, a person should not bear any expenses in favor of the financial institution to which he entrusted the money.
How to find out
For all the unreliability of traditional ways to save money for old age, many people are wondering how to accumulate points for retirement. The funded part is formed at the moment when a person receives SNILS. 6% is always transferred from the salary of a Russian to the PF account. At the same moment, he can transfer part of it to his personal account. Savings accumulate in the account, and after they begin to pay in the form of a pension. Those who wondered how to find out how much they accumulated pensions should contact the Pension Fund. According to the new system, a person accumulates points for retirement. And if he wondered how to find out the accumulated pension, he can turn to the PFR website. You can withdraw money from this account only after reaching a certain age. And those who ask the question of how to withdraw the accumulated pension should know this. There are no ways to cash out the accumulated amounts ahead of schedule. And this applies to both public and private pension funds in absolutely equal measure.
The standard approach is to accumulate large sums to matureage, and then purchase a pension from an insurance company. For example, if a person owns his house, you can sell it. Half will go to new housing, and the second part - to retire. It is possible to rent out the property. The next option is to gradually invest in order to form a pension in the future.