One of the most difficult elements of any financial portfolio is saving for retirement. For most of us, retirement always feels so far away and we feel like we’ll either have plenty of time to save for it, or we simply have other priorities that are currently higher on our list.
Products like short term insurance and health cover seem to take the priority in our financial plan. Currently, most South Africans are not ready to leave the world of work at the traditional retirement age of 60 or 65 as they have not saved enough money. Many are forced to continue either working in their current job or start their own business.
“Of the 300 pensioners surveyed [in 2014], one in five indicated that they supplement their retirement income with part-time work,” said Kobus Hanekom, head of strategy, governance and compliance at Simeka Consultants and Actuaries. (Fin24)
There are many factors that influence this statistic, but the bottom line is: retirement, for many, doesn’t pan out the way that they’d hoped for. Whether it’s forced retirement, healthy people living longer than expected, poor market performance or bad financial planning, the dream of ‘living it up’ in retirement is not the current reality for a high percentage of retirees.
Having a ‘second career’ means that when you retire from your ‘first career’ at age 60, you are able to keep adding to your retirement savings. If you are able to delay retirement by six years, you can double your capital upon retirement; conversely, retiring six years earlier will leave you with half the capital to last an extended time period.
The best option for working towards a well-planned retirement is to take ownership of your own retirement planning with the assistance of a qualified financial advisor. If your current employment package offers a compulsory pension plan, let me walk you through the benefits as well as your other options to supplement and enhance your retirement plan.