Pensions and retirement are words that do not resonate for young adults - or many of their parents for that matter. In fact, what most investors both young and old are aiming for is financial freedom. That is the freedom to choose to work or not, to change career or drop your working hours to take up an interesting hobby, rather than the dated idea of a cliff edge of retirement which you jump off and then settle down to an uninterrupted life of leisure. In fact, research by the Institute of Economic Affairs recently found that retirement is bad for your physical and mental health.
Most investors ideally want financial freedom to come as early as possible, preferably by 50. But how much do you need to put aside to 'retire' rich and young? And do you really need to use a pension?
Many people have lost faith in pensions, sometimes with good reason - poorly performing investments or the government's relentless fiddling with pensions policy. However, the simple truth is that most people have no idea how much they need to save to fund a comfortable retirement. In many cases, this is self-denial - you may think the figures will simply be too scary. However, it is not enough to just buy a few investments and hope for the best. There is a big difference between buying an investment product and putting together a financial plan that will enable you to achieve your dream.