We build an annuity

The main principles for building annuities can be summarized in several universal observations. Just adopt them and you are ready to rent.

The universal rule number one is that you do not count on money set aside for retirement. Don’t plan to repay a mortgage, for example, once you’ve saved a nice amount. Avoid any spending, let the funds increase.

Contributions from employers

Find out if your employer offers PP and life insurance contributions. The statistics of the Association of Pension Companies of the Czech Republic show that in 2016 the average employer’s contribution was 770 crowns. The average is calculated from all contributions of employers who contribute to this type of savings for their employees.

After the contributions, be interested in every employer you will work with during your life. This is, after all, one of the most widespread and popular benefits.

Bank as a starting point

If you do not know which financial product or instrument to choose, ask at the bank where you have your personal account. An interview with a bank employee will at least guide you appropriately. It will most likely be a traditional product mix such as pension savings, mutual fund investments and life insurance. The standard bank offer will not be dazzling, but you will still get a basic overview. A financial advisor with a more diverse portfolio of financial products will provide you with a better service.

Get in the habit

Start saving for retirement as soon as possible. Even low deposits of several hundred crowns a month will create a habit for you and strengthen your financial discipline. Once you put the money aside, you create the much-needed and already mentioned habit. Over time, you will balance the appropriate amount to defer a reasonable amount. Laconically, it can be summed up that the deposit is just right, not a little, not a lot. It’s laconic advice, yet crucial.

Forget about money

Do not count on money set aside for retirement, let it be valued and do not plan to pay a mortgage with it, for example. As well as no other expenses – such as the reconstruction of the apartment or the purchase of a car.