WHILE is it better to start early in life for your retirement, it is never too late to start.
The 2017 Old Mutual Savings and Investment Monitor showed Mzansi has a poor savings record – 40% of people questioned say they have no form of retirement savings at all.
Derick Ferreira, head of product management at Old Mutual Personal Finance, said: “While not everyone has the financial ability to save for retirement in their 20s, it needs to be remedied as soon as possible.”
People face a drop in income when they retire and the harsh reality is made worse by factors such as inflation and medical costs.
“Thanks to new medicine we are living into our 80s and longer. This means our money has to last for at least 20 years, but even more worrying, at an inflation rate of 6%, the buying power of money will be cut in half in 12 years!
“It is most likely that medical expenses will increase in your old age – 60% or more of our medical costs happen after 60 years.”
Ferreira shared some of his retirement planning steps.
Set goals
Before you even begin planning, know what it is you are saving for. When you want to retire? Where you want to live? What you will do with your time?
Get advice
With the right adviser, you can determine how much capital you will need for your retirement and how close you are or how you need to close the remaining gap.
Know the taxes
Retirement annuities are one saving method but there are others – and they all have different tax consequences.
Take action
Decide on a financial plan by agreeing to the right solutions, and commit to it for the long run.
Review and update
Check your plan yearly.
