In this video I’m looking at what % of your gross income you should be contributing towards your pension fund as per your age. I further look into the importance of having a retirement annuity outside of your employer pension fund.

Please have your retirement annuity with an investment company not an insurance company.

Disclaimer: Remember anything I say here does not constitute as financial advice, if you you are looking for financial advice please speak to someone who is certified and is registered with the FSCA.

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LEARN MORE ABOUT: Retirement Annuities

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As we all know, pension funds are an essential source of retirement income. These are long-term savings accounts designed to provide financial support during the post-retirement years. In most cases, employers and employees contribute to these funds to ensure the retired employee has a reliable source of income.

When it comes to pension contributions, age plays a significant role in determining the amount of money to be contributed to the fund. Typically, younger employees will contribute less than older employees. However, as they progress in their career and their income increases, so does their contribution.

In general, employees in their 20s and 30s contribute the least amount to their pension fund. This is because they have just started their career and have not yet reached their earning potential. However, contributing even a small amount to their pension fund at this stage can have a significant impact in the long run due to the power of compound interest.

As employees enter their 40s and 50s, their contributions to the pension fund increase significantly. This is because they have more disposable income, and they are aware that retirement is getting closer. At this stage, employees are more likely to take an active interest in their pension fund, review their contribution amounts regularly and increase it as appropriate to meet their retirement goals.

Finally, employees in their 60s have the highest contributions towards their pension fund. They are often the most senior employees, who have been working for many years and have reached their earning potential. Their contributions at this point are usually higher, and they are close to retirement age or have already retired, making their pension fund an essential source of income.

In conclusion, the amount of contribution to a pension fund varies by age, reflecting the employee’s level of income, career stage, and proximity to retirement age. It is essential for employees to start contributing to their pension fund early as, with time, even small contributions can create significant savings. Additionally, employees should regularly review their contribution amount, ensuring it adequately represents their retirement goals.