Are you saving?

Question

My bf and I have started putting money into an ISA but we are only 22. I just think it's a little bit young to worry about when we retire, I'd rather spend the money on doing up the house. Have you started saving yet. I got a letter a few months ago from the DWP and it says I should get like £100 a week when I have my pension and my bf slightly higher because he works full ime, is this true? I thought they had scrapped the whole government pension thing for when we get to that age. Will we still get a pension in 40 years time?

Answer 1

I can't answer your question about the pension, but I can give you some insight about your question regarding saving.

I know it's hard to put money away when you are young and there are things you want to buy and do, but take it from someone who is 50 now that every dollar you put away now spells freedom for you in twenty years or more. If you want your options for middle age and older to be greatly expanded, you need to save now.

Saving now is good in another way: it's an easier habit to make now than it is when you get older. If you get into the habit of "paying yourself first" by saving now, it will become a habit that will stay with you for the rest of your life, greatly to your benefit.

Look around you at the people who are in their fifties and still laboring away with no prospect of retirement in sight. Is that what you want for yourself? Set a goal of saving and stick with it.

Trust me, you will never hear someone my age say "gee, I wish I hadn't started saving so much so early!" But you will hear a lot of people in their fifties say that if they could do their lives over, they would have started saving for retirement at a much younger age.

Answer 2

I don't know what's going to happen in 40 years time, but I had a similar letter about the pensions thing.

I'm 22. I have an ISA too plus and an Instant Access account. I save regularly and think it's a really good idea, if not for retirement, then at least something in the nearer future e.g a deposit on a house. I don't pay hundreds of pounds in every time, just about £80 a month and it's building up nicely. That way I spend what I like in the shops, safe in knowledge I have some money put away for the more important things in life.

Answer 3

I have a hard enough time predicating what will happen to the US Social Security System to hazard a guess at what might happen with the British model.

But to answer you question, yes you should start saving for retiement when you are young. I know you would rather spend the money. That's the fun thing to do.

But consider the power of compound growth of your investments.

I did some calculations.for an article I wrote.

At 22 years old if you put $100 a month in an IRA (I assume the US version of the ISA) that grows at 10% a year, you will have about $865,000 at age 65. 10% a year compound growth is about what you should expect if the money was invested in a no-load S&P 500 Index Fund.

If you contributed the full $4000 a year allowed right now to an IRA (rising to $5000 in 2008), you would have $2,600,000. For about $11.00 a day, you would have a small fortune.

Our laws might be different from yours, but this shows how money can grow and anyone can become a millionaire given enough time.

Answer 4

IT IS NEVER too early to start saving. I wish I had started earlier !!

We started our son saving the moment he was born. ALL the money he ever received as gifts went into a savings account then onto a Mutual fund. He is now 20 and has more than the average 50 year old. He continues to save and invest due the fact that he does not want to bust hisass year after year till retirement age. He wants to relax alittle as well.

Put away as much as possible $300 to $500 a month would be great for someone your age. Since this is ONLY your boyfriend, you better be saving in seperate accounts for when a break up occurs it can down right ugly over money.

Answer 5

When I was your age the Govt told me I could reture at 60. Now they're saying that I'll be better off working longer! Although I now have a savings/pension plan, I do wish I'd started a lot sooner!

Answer 6

saving is a good thing, I say that with hind sight. However I personally didn't begin saving until i was in my early thirties, but I have had a fantastic time,working and travelling around the world. I am very fortunate now because I have managed to create a career for myself that generates me a very nice living and can save quite alot now. What I am trying to say is Yes save if you can, but not to the extent that you miss out on life's opportunities, but don't spend your money on frivolous things. Don't sweat it too much, at 22 you are supposed to be reckless, at thirty you should be sorting those mistakes out and by forty things should be looking up.

Answer 7

ok heres the deal if you not going to inherit money i mean multi millions of dollars then you save your whole life till your mid 50s and retire, and most of the time pensions fall apart there will be no social security when i get older so either you save and invest win the lottery or inhierit, for you i would save evrey penny

Answer 8

You can never be to young to start saving. If you have extra cash, save it, rather then spending it on something you do not necessarily need. I am 24 and have been putting money into an IRA for three years now.

Answer 9

Always put a little away each week as you never know what will happen tomorrow, but don't forget that life is for living, no point in being the richest person in the graveyard.

Answer 10

I save with my bank lloyds tsb i have a monthly savings i save 100 pounds a month and its 8 % interest