For many, retirement is dreamt of as the stage of life where one is able to look back on their years and reminisce, while enjoying (in comfort) this hard-earned period of relaxation. However, a staggering statistic shows that about half of South Africans do not have a financial plan in place for retirement, and that only 6% are generally able to retire comfortably.
The reality of rising living expenses results in a mindset that putting savings away monthly is a luxury, rather than a necessity (which we argue your future is). This is why developing a budget, together with a solid investment and retirement plan with the help of a professional is of utmost importance today... and that's what we are here for!
So, how much is enough?...
Trick question - the answer is different for everyone! There are obviously ways to measure and calculate how much you "should" be saving based on your income, age, and length of investment, but the amount that you will need to live the life you desire will ultimately depend on what you want for yourself.
Our advisers will help you to build a retirement plan, offering you investment advice around your life plan, financial plan and estate plan that will help you to achieve your dream retirement from here.
...and how do I invest in my Future?
It's easy enough to say that the earlier you invest, the more you will see as a return because of our good friend 'compound interest'. It's also easy enough to figure out that the later you start saving, the more you will have to put away further down the line. However, more and more young adults are struggling to manage any kind of savings, let alone to be planning for something like retirement that seems "so far away".
So many factors come into play when considering retirement and investments - the timing of your retirement, your rate of return, risk levels, inflation, annual withdrawals, and so on. In fact, cashing in on your savings before retirement (for example, if you have been retrenched or are changing jobs) is one of the biggest reasons that individuals with financial plans in place do not have enough to retire with when it comes to that time!
This fact alone indicates the importance of setting up a retirement benefit fund with your employer, which can be transferred to a new employer, or to a Retirement Annuity or Preservation Fund (which have different rules for withdrawals and contributions, and can be selected accordingly) with the help of your financial planner at a later stage.
Talking to one of our financial advisers will give you a chance to learn about a wide range of options that suit you, and that will allow you to start saving - even if it is a small amount to set you off. This is the best way to start, and usually amounts to much more than if you were to start putting away larger chunks later in life.
The Retirement of your Dreams
It is important to focus not only on money when planning for retirement, but also on the personal meaning and enjoyment that will come from these years for you - what will the result of your own life goals and plans look like? With the foundations for a life plan in place, you and your adviser will be able to prepare for and invest in this important future stage of your life.
Your ambitions and choices now will largely impact how you want/choose to live your life later on - How would your future look to you if you were to have a smooth-sailing, dream-like life? Turn the answer to this question into a goal!
Smaller goals can then be set with the help of your adviser, to reach your major one, through future-specific questions like: How do I envision my retirement? Where do I want to live? How do I want to spend my days? Will I have any dependents? Do I have any debt that needs settling pre-retirement? Do I want to travel - how often, and where to? What kind of legacy do I want to leave for my family? Do I want to work, study, enhance any skills, or volunteer my time during my retirement?
Working through and discussing your answers to these questions with a financial adviser will be extremely beneficial in helping you understand your current situation regarding your future retirement, how long your money should last, and how you can altar or improve these savings to help you to reach your dream retirement financially.
Don't become one of the statistics with 'detachment issues' when you reach retirement, and get in touch or click 'Book Now' below to start investing in your future self!
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