Pension needs a rebrand … and we’ve got just the thing
Next week is Pension Awareness Week and that’s fun because there’s not enough awareness about pensions. Much of that is down to the word. It’s all a bit grey.
For one, pension is almost pensioner and who wants to process that right now? Then there’s the sound. Penn-shun. It’s an onomatopoeic nightmare. The obnoxious shhh gets stuck in your teeth like a rancid Werther’s Original …
Now compare penn-shun to other saucy terms in the business-culture-lexicon. Dividend, for example, is just so breathy and divine. Equity too, with its biting staccato phonics and soft landing, has a mega cool factor.
Then there’s passive income. The first part’s silky-smooth. Those seductive esses slide out like sunbeams while the second part … well income is money-in and that’s exciting, no?
Passsssssive money
Passive income. This sultry little concept has bubbled on the tongues of business gurus and lit up LinkedIn for years now.
If you need a definition, a passive income is when you set up a money-making mechanism, often a side-gig, that requires little-to-no oversight or maintenance. It generates pennies and / or pounds while you’re busy doing other things.
Everyone wants a passive income, but a penn-shun? No ta.
So maybe it’s time to scrap the penn-shun. It’s had its day. We need a successor and I’m delighted to say I have one.
Introducing the Piffle
The Piffle, or Passive Income Fund For Later, Everyone, is exactly what it says and more.
Contributing to your Piffle is magic and it’s open to everyone. In a Piffle, cash gets added and tax gets subtracted before a wondrous piece of financial alchemy turns your more money into even more money.
Floored? You should be. The Piffle’s three power mechanisms (the P3 [trademark pending]) begin at the fact that your employer has to contribute. It’s what we at Piffle HQ call free money.
Secondly, your Piffle tax breaks offer up to 45% relief for higher tax payers and, wouldn’t you know it, we call this part free money. The third bit is Piffle’s secret sauce and it goes by the name compound interest. This is when your interest earns interest on its interest.
It’s what we Pifflers again refer to as free money …
Pensions aren’t piffle
Alright, let’s sober up. By now you’ve probably guessed the punchline: a pension does all of the above. Unfortunately very few get to the free money parts because hearing the word’s like chewing on a sleeping pill.
Nonetheless, a pension is built of funds that you put in and your employer puts in and the taxman puts in and compound interest puts in …
One day, when work becomes a choice, your pension will slide into your bank account while you’re busy doing other things. It’s a saucy passive income.
The best time to investigate your pension is now. Please review where you’re at and check your employer policy. Take advantage of the extras and the tax breaks. Keep putting in and let Einstein’s eighth wonder of the world do its thing.
It’s not piffle, it’s your pension … and it’s magical.
Time to explore your pension
Pensions are a significant topic and we cover bits on the Money Means blog, here and here, with a note on How much is enough, plus information on your state allowances and how to forecast how much you’ll need if and when retirement comes, right here.
Oh and shill time: there’s plenty on pensions in the Money Means book.