by RB Capuz

Created on: March 08, 2010

Most young adults today – university students and 20-something professionals – have short-term plans for their future. They think more about what they will have accomplished by the time they reach the age of 40. They try to save money for everything else, except for retirement.

Well, young adults can always argue that it’s too early to think about retirement when you have so much time in your hand. They wanted to enjoy life while they are young. After all, most professionals only start planning for their retirement when they are in their 40s. The current financial crisis did not help either. Most individuals, old and young, see investments as risky assets. Add to that the fact that quite a number of university graduates are already burdened with student debt even before they start earning. Paying off their debts still remains a priority.

Only a small fraction of the population under the age of 29 has taken interest in saving for their retirement pension. A smaller portion still actually takes pension policies. This trend has been going on for decades. It only goes to show that young individuals are less inclined to stash away money for long-term investments. For them, the long-term benefits outweigh short term needs, especially when their personal finance is mostly influenced by everyday expenses and outstanding bills. Most of these individuals are unaware that starting their pension early could really be beneficial

There’s no wonder why you don’t see young people talking about pension the way they talk about dating. The topic is way too complex for the average young audience. It is not something cool to talk about and the technical jargons those wealth managers often use are simply hard to understand, especially if you are new to the subject. They will even give you a booklet – a sort of a “pension guide” – filled with complicated statistics and charts that could leave you with more questions than answers.

Due to this apparent lack of enthusiasm for pensions, most individuals prefer personal savings or enter the property market instead. But if we could influence the younger crowd to save up while they are young, then they could reap the rewards by the time they turn 65. Picture this: if you are 18 and you can save $300 monthly for a pension plan in the next 47 years, you could be having $920,000 when you reach retirement age (depending on the plan you’ve chosen as well as the annual return-after-charges percentage).

So is it too early to start saving for your future? The answer is “No”.

Building an investment portfolio while you are young is a good way to secure your future. Of course, there are potential risks, but the benefits more than outweigh them. It would also help if you can talk to a wealth manager that takes time to explain to you in layman’s term how the pension scheme really works and how you could benefit from it. .

If the future is not carefully planned, you could be living off government support once you are way too old to work. Now that’s something you don’t want to happen.

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