It’s that time of the year again where we need to reflect on the year that’s gone by. It’s a time where we need to identify what has worked for us financially and what we should focus on in the New Year.
Besides looking at our normal day-to-day financial aspects, we need to ensure that we are well covered in our retirement. “Retirement is and should be an important element in our financial journey. Whilst many leave retirement planning to the later stages in life, we urge customers to build on their retirement plans earlier rather than later,” says Preenay Sathu, FNB Financial Advisory.
Compared to other countries and according to the World Health Organisation (WHO), South Africa’s average life expectancy is 63.6 years, based on 2016 data. “With the uncertain economic growth and volatile markets, retiring comfortably should be an aim for all of us. This initial retirement planning stage is an essential step in securing your financial future and comfort,” says Sathu.
Your current lifestyle will help define how much you will need to start saving. But before you start with your retirement plans you need to ask yourself the following questions:
- At what age would you like to retire?
- What lifestyle would you like to lead when you retire?
- Will you still have dependents when you retire?
- What will my monthly costs (household, car, credit cards etc.) be?
- How much money would I need per month?
Sathu adds that, “Retirement planning can be intimidating for some. If you uncertain about your ideal retirement strategy, financial advisors are available and will be able to guide you through the process of choosing the best plan to suit your lifestyle needs.”
Another key element that will help in driving your retirement plan is to consider having short and long-term goals which will help you navigate their retirement journey. “Goals are an important element in any financial journey as it helps define how and what we save towards. With well-defined goals in mind we can clearly see what our retirement lifestyle will look like. It will also help us determine whether we need to save a little more each month or limit our monthly expenditure,” says Sathu.
“Your age does not define when you should start your retirement planning. Retirement planning should become an essential part of your financial planning journey from the time you start your first job. It is a necessary part of your life so make your retirement planning a priority,” concludes Sathu