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PREPARING FOR YOUR RETIREMENT

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Don’t wait until it’s too late – get your retirement plan in order today!
Don’t wait until it’s too late – get your retirement plan in order today!

FEW young people even bother to think about retirement.

Krisen Rabindra, national sales manager at Standard Bank Financial Consulting, says waiting until you are close to your retirement is risky.

“Securing your future should begin the day you start work. You should use a monthly debit order deduction, which should be about 20% of your monthly salary after tax,” said Rabindra.

She said keeping this level for 30 years, increasing your contribution every year to adjust for inflation, will ensure a happy retirement.

“If, for example, you are 20-years-old and want to retire at 60, you need to build your retirement fund over 40 years.”

Rabindra said any person can build a retirement fund as long as they were working.

Interest and returns on investment are constantly changing so it is very important to ask for advice from financial experts to help you develop a good retirement fund.

In this process all risk is considered and advised about.

“Making an investment that has a higher than average return but also has a higher risk is fine when you are 30, but, these types of investments should be avoided if a client is near retirement age,” she said.

An adviser will help you understand everything about the short, medium and long-term investments to help you have a good retirement fund.

How do you work out what you need to retire on? You start by writing down your present salary after tax. Now you must work out your earnings for the year before you retire. To do this:

- Increase your salary over the years you have to go before retiring by 10% a year to get a salary level for your final year of work.

- Work out what 80% of this final yearly salary will be.

- Multiply this amount by 20 – this is the average number of years people spend retired. This is to work out the amount of payout you will need for a comfortable retirement.

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