The slogan “ Live for Today! “And much of society, especially young people, lead a way of life where everyone enjoys every moment but seldom thinks about the future.
However, over time one begins to think of a period of life in which he will no longer work, that is to say, retirement age, a time when you should start getting a little interested in your old age.
Of course, graduates who have just graduated and who are just starting their careers certainly do not think about such things. In order to avoid having to rely on a small state pension in their old age, every person is afforded several opportunities to spend their retirement years in the best possible and financially secure manner.
Currently, the state provides cash benefits to people over the age of retirement at the level of the 1st pension level
The 1st pillar pension is based on the social security contributions paid while the person is still in paid employment. At the same time, the 2nd pillar pension is already mandatory, which also increases the amount of the pension. However, if it seems that it is not enough, everyone can apply for the 3rd pension pillar.
This level, or voluntary pension scheme, allows anyone to make additional savings in their pension fund. The third pillar of pension is based on the transfer of a person’s free funds to this savings account.
Money can be deposited at any time and in any amount – as much as one can afford.
This is definitely one of the best ways to save money without loss to spend as much as possible on your old age. Moreover, when you deposit money at the 3rd pension level, the amount of money increases over time – based on the amount of money deposited in the fund and the specific interest rate, the bank calculates the interest yield that is added to the person’s personal funds in this account.
Even more advantageous is the fact that such a money transaction uses a compound interest formula
This means that, at the end of each period, interest is charged on the money deposited in the pension fund. This amount is then added to existing funds and, at the end of the next period, interest is already calculated on both initial capital and previously earned interest. In the long run, the 3rd Pension Fund can bring significant profits to people. This means that the earlier such a voluntary pension fund is established and regularly supplemented, the person will have accumulated enough to spend his / her old age without any worries.
It is only possible to start using the 3rd pension level from the age of 55, but when you reach that age, you should think twice about getting your savings right away. It may be more profitable to wait a few more years and then start getting paid, because with each passing year the profit that a person earns increases. If the 3rd pillar pension fund has been established for 25 years and the contributions have been regular, then by the retirement age the savings may have reached quite considerable levels. However, it should not be forgotten that the payment of the 3rd pension pillar savings should not be postponed for a very long time – the savings are meant to fully enjoy the retirement age. However, if the saver himself is not able to use the money he has accumulated, he can also inherit it.
You can also use the automatic payment service to make the whole money-saving process easier. This means that you do not even have to remember to make a monthly transfer to your pension fund – the amount you choose is automatically transferred on a specific date. As a result, saving money for old age is simply easier. If you take advantage of this opportunity, you can really stop thinking about old age – savings will be made and profits will be made.
The 3rd pillar of pensions is not the only way to save money for your old age
Everyone is given the opportunity to try their luck in investing money. Of course, such financial transactions are not 100% profitable – anyone can suffer losses because the stock market is volatile. However, one can always choose a safer way of investing, such as government bonds. They have a low level of risk, but can also result in lower profits for the individual. Individuals who are financially knowledgeable and know how to invest their money properly and successfully can also invest in riskier transactions.
The value of equities is highly volatile, but it is precise because of the high risk that these securities can give the investor high returns. The person can also deposit the acquired money, for example, is a term deposit. There are many opportunities, everyone can increase their income – all you have to do is choose the best option for you. Similarly, if a person does not understand anything about such financial transactions, it is always possible to turn to professionals who will help to invest as much money as possible.
There is no need to postpone saving for old age
The sooner you start thinking about your future, or more precisely, your retirement years, the more money you will be able to save. Nor is it impossible and complicated, which requires a great deal of effort.
However, old age is a time when you should not worry about whether there will be enough money for rent and bills, and even more so for subsistence. At this time you have to enjoy life – to reap the benefits of it, even those that seem silly or unnecessary. However, there is only one life for everyone. It is good to live today, but that does not prevent us from doing things well in the future.