How I’d beat the State Pension with just £5 per day

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. At present, the standard State Pension for retirees after the age of 65 is around £9k a year. However, according to several studies, this tiny amount isn’t even enough for most pensioners to live on when they quit the rat race.Therefore, today I’m going to explain how you can start saving to beat the State Pension with just £5 a day. Using this relatively small amount, savers can build a substantial nest egg with the potential to produce a sizable State Pension beating income in retirement.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Daily savingA fiver a day might not seem like much, but when combined with the tax benefits available by using a SIPP, it can make a big difference.For example, £5 a day works out at around £152 per month. Any SIPP contributions are entitled to tax relief at a taxpayer’s marginal tax rate (20% for basic ratepayers). As such, after including tax relief, this monthly contribution jumps to £190 a month or £2,281 a year.The best way to grow this money is to invest it in a low-cost passive tracker fund. The FTSE 250 is an excellent index to track for this purpose because it is an index of mid-cap companies, which tend to produce better growth rates than their larger peers.Indeed, since its inception, the FTSE 100 has returned approximately 9% per annum. The FTSE 250, on the other hand, has returned closer to 12%.Building the potThe combination of a SIPP, with its tax benefits, and FTSE 250 with its double-digit returns, is a powerful one for investors.I calculate that monthly deposits of £190 over 30 years would build a pension pot worth £671k from a standing start. This would be enough to give an annual income of at least £26,000 for 25 years in retirement, more than triple the current rate of the State Pension.If you don’t have the luxury of time on your side, it is still possible to accumulate a pot of £190k from a standing start over two decades.That would be enough to produce an annual income around the same level as the State Pension for two-and-a-half decades.Getting savingNo matter how much time you have left to go until retirement, or how much you can afford to put away, by using the principles above, you can build a substantial retirement pot with just a few clicks.Most online stockbrokers now offer a regular monthly investment plan with a direct debit facility from as little as £50 per month. So, once you’ve set up your contributions, there’s no further effort required.In the meantime, passive tracker funds require no babysitting as they’re only designed to track their underlying index. There’s no need to choose a manager or pick strategies. You just need to set up the monthly transactions and forget about them.So what are you waiting for? Now is the time to start saving to beat the State Pension. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. How I’d beat the State Pension with just £5 per day Rupert Hargreaves | Sunday, 19th January, 2020 Image source: Getty Images center_img Our 6 ‘Best Buys Now’ Shares See all posts by Rupert Hargreaves Simply click below to discover how you can take advantage of this. Enter Your Email Address Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997”last_img

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