Where does your pension contribution go?

The Sterling Report  With Marian Ross  Sunday, March 08, 2015

MANY savers believe that their pension contributions (as well as those made on their behalf by their employers), or some multiple thereof, will be returned to them during their retirement. However, as we illustrated last week, devaluation and inflation erode the value of money over time.  Furthermore, the performance of the assets within your pension fund will determine the amount of funds you have available to you during retirement.

This simple fact often goes unnoticed and few people try to understand what happens to their money after it is deducted from their pay cheque. What are the assets in your pension portfolio earning? Is the rate of return above devaluation and inflation? Even if the return is positive, is it sufficiently high to compensate for the risk of the investments in the portfolio?

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