Page 103 - Benjamin Franklin\'s The Way to Wealth: A 52 brilliant ideas interpretation - PDFDrive.com

47 THINK AHEAD

Although Franklin doesn’t mention pensions per se, he would definitely
have approved. He even appears to pave the way to pensions when he
says ‘At present, perhaps, you may think yourself in thriving
circumstances, and that you can bear a little extravagance without injury;
but, for age and want, save while you may’.

DEFINING IDEA…
Always be nice to bankers. Always be nice to pension fund managers.
Always be nice to the media. In that order.
~ JOHN GOTTI, US GANGSTER

‘He that lives upon hope will die fasting,’ Franklin adds, which is a slightly
grim but possibly accurate summation of our position if we don’t plan for
old age. There’s something uncool about talking pensions, particularly
amongst the young, but there again there’s something much more uncool
about living off tinned food in a small flat when you could be sipping
cocktails by the beach.

If you’re counting on a state pension to take care of you in your golden
years then that gold is going to lose its shine pretty fast. Simply put, more
of us are living longer (particularly women) and since the workforce isn’t
growing that means fewer active workers putting money into the pot to pay
for those claiming retirement benefits. It’s not quite as simple as that since
workers are more productive these days, earnings continue to rise, and
there’s the less cheerful factor that growing obesity means the next
generation may halt or even reverse the trend of longer life. Despite that,
the essential picture is that anyone counting solely on a state pension is
likely to be leading a much less rewarding retired life than those who start
to save with a private pension or investment plan.

There are hundreds of different pension plans out there but essentially three
major approaches (if we ignore the basic state pension). The first is to
contribute to your employer’s pension scheme. This is probably the most