There was a fascinating paper published by the pensions institute in 2010 entitled ‘spend more today’ and it was about ways to encourage (or to use the economic vernacular ‘nudge’) people to take out pensions.
We realise that forty pages of technical reading may not be everybody’s cup of tea so here is the most brief synopsis we can offer you as an alternative. Just note that this isn’t what you ought to do per se, it is about how the system ought to work.
They put forward the idea of using ‘SPEEDOMETER‘ which stands for ‘Spending Optimally Throughout Retirement’, and the steps to take are as follows:
1: First make a plan, ideally with, but if necessary, without an advisor. This first point is of interest because we obviously think everybody should get advice when planning their pension, but upon reflection it’s equally true that a ‘start’, even with no advice is better than inaction and there is simple reason behind it.
Say you decided to start putting €200 a month into a pension, given that you might be …