Setting up a pension plan is something that everyone should do. Even if you’re entitled to a company pension, it’s a good idea to have an additional pot of money on the side. And, if you don’t have a workplace pension to fall back on, a private scheme is essential if you want to live beyond what the state pays out. Of course, it’s important to know this, but putting it into practice is another thing.
In fact, the data shows that one in four Americans don’t have any money saved for retirement and, of those that do, a majority don’t have enough. Delving deeper in the data provided by PwC’s Retirement in America report, 13% of Americans over 60 don’t have any retirement savings. Go down to people aged 18 to 29 and that figure increases to 42%.
It’s a similar story in the UK. Research by Unbiased found that 21% of British adults have nothing set aside for retirement. When you filter by age and look at Brits who are 35 or younger, the figure increases to 24%. Therefore, we can see two things here. Firstly, many people aren’t prepared for retirement. Secondly, younger adults are the most unprepared of all the generations.
Apps to the Rescue
The good news for those who are a few decades away from retirement is that there are plenty of apps that can help. Of course, it’s never too late to save and everyone can and, probably should, start. However, the younger you are, the better. Not only does it mean you can spread your investments over a long period, but it also means you can reap the benefits of compound interest.
Those facts aside, you can also use apps that make planning, saving, and investing a lot easier, particularly if you’re tech-savvy. With this being said, the question is: what are the best apps to manage your retirement plan? Well, based on our research, here are the apps you can use to create and execute a solid plan for your retirement.
Setting a Goal: Get a Budgeting App
The first thing you need to do is set a goal. This goal has to be based on the amount of money you can save and the amount you need/want in retirement. As you’d expect, the second half of the equation will be based on the first half. In other words, you can’t set a retirement goal of $2 million if the money you can afford to save doesn’t allow you to get there.
A great app to help you set a realistic budget is Mint. As well as tracking and analyzing your spending habits, this savings app allows you to compare projections for various investment projects. This means you can plug in your retirement plan parameters and see what you can expect to have based on your budget. Mint is free and a great way to establish a realistic savings goal.
Find a Way to Invest: Get an Pension App
The next step to making your retirement plan a reality is investing. Putting money aside in a savings account is fine but you have to understand that inflation can reduce the spending power of your money. In simple terms, the amount a dollar can get you today might not be the same as it can get you in 30 years’ time due to inflation. Because of this, it’s sensible to make tax-efficient investments.
For example, Brits can download a pension app from iOS App Store or Google Play Store and put their money into a self-invested pension plan (SIPP). These apps allow you to invest in the stock market and shelter any profits from capital gains tax. Additionally, investors can get up to 45% tax relief on their contributions. Finally, these apps also offer investment trackers, so you know exactly how your pension pot is performing on top of having the ability to make money and, in turn, beat inflation.
Forecast the Future: Get an Outlook App
Once you’ve set your financial goals and started investing via a pension app, the last thing you need to do is monitor your progress. As we’ve said, pension apps have inbuilt trackers, but you can go a step further and download a second app that can forecast your financial future. One app to try is Retirement Outlook Estimator. The Retirement Outlook apps lets you input various pieces of information. From these data points, it offers analytical summaries of how likely you are to meet your financial targets.
It does this through a weather system. Once you’ve entered your age, salary, retirement goal into the Outlook app, it provides a weather forecast on how you can “brighten” your outlook. For example, if you’re not getting the best savings/rate of return on your investment, it will be cloudy. You can use this forecast, along with some tips offered by the app, to blow the clouds away and make it sunny.
This is a really simple way to maximize your investments. However, it’s only useful if you lay the foundations first. That means setting a budget, creating a goal, and getting a pension app through which you can save and/or invest money. Once you’ve done that, you can monitor the forecast and make sure your future is looking bright.
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