WHEN last did you look at your retirement plan?
Some people have never gone back to it since drawing it up, while others don’t even have a copy.
One big mistake many Mzansi people make is to think their monthly contributions towards retirement savings will be enough.
Only a few people look at the performance of the funds they’ve invested in and whether or not the contributions are enough to get them to their retirement goals.
FNB Wealth and Investments wealth manager Preenay Sathu said it’s vital to do regular reviews of your retirement plan to ensure it’s in line with long-term goals.
“This will ensure you make the right adjustments should there be areas lagging behind.”
Check your retirement plan:
- Fund performance: Funds you are invested in may be performing well today but might not be the case in future. Regularly rate their performance and rebalance the portfolio when necessary to ensure you achieve the desired gains.
- Asset allocation: Judge the asset allocation in relation to the overall portfolio, to see if it is still in line with the overall goal of the portfolio, considering macro-economic and political factors.
- Fees: It’s important to ensure the fees connected to your retirement plan are fair, transparent and do not reduce the overall performance of the plan. Fees to watch out for include advice fees, platform fees, asset management fees and performance fees.
- Economic changes: Political instability and inflation affect your investment. You should look at these when reviewing your retirement plan and get the services of a certified financial advisor to help you invest in products that will pay off.
- Standard of living: When you retire, you should have the same standard of living as during your working life. Proper planning is key to having enough income.
- Dependants: If your kids and extended family rely on you for financial support, it should be taken into account when you retire.
“Retirement planning is a long-term commitment that needs a lifetime of discipline for a financially healthy retirement,” Sathu said.