15:09 16 January 2013
There are so many things to consider when investing for your retirement. How you invest your money will have a direct impact on the quality of life that you’re going to have when you reach your golden years.
If you’re looking for a retirement savings that will allow you to have direct control over your investments, a self-invested personal pension plan will work best for you.
Here’s a step-by-step guide on how you can get started with Self Invested Personal Pensions (SIIP):
1. The first step is to fully understand the concept behind self-invested personal pension plans. Basically, it’s just another type of personal pension plan that offers the same tax benefits.
The only difference between SIIP and standard personal pension is the amount of control you’ll have when choosing your investments. With SIIP, you have direct control as to where you want your money to be invested.
You’re given the option to select each investment yourself or get a fund manager or stockbroker to look after your fund.
2. Decide on the amount that you’re going to invest. The second step is to figure out how much you’re going to invest. This is very important as this will help you in choosing the best type of self-invested pensions.
You see, some pensions will require minimum monthly or lump sum contribution. Naturally, it will become easier for you to choose which one to take if you know how much you can invest early on.
3. Decide on where to invest. Next step is to decide where to invest your money. You need to have certain knowledge on investment markets before you put your money into it.
You have the option to invest in different markets, different sectors in different locations worldwide. If you haven’t decided where to invest yet, choose SIPP pension provider with broadest choice of investment markets to keep all your options open.
4. Know the charges. Don’t get started with an SIPP pension provider unless you know exactly what they charge. Initial set up costs of self-invested personal pension plan can be huge compared to other personal pensions. Aside from the initial set up cost, you’ll also have to pay for ongoing annual fees.
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