The reality for most of us is that we will live to a ripe old age. Looking at the breakthroughs in medical science, people that will live to 120 - 150 years old, have already been born!
Most people secretly dream about the day that they won't have to work anymore, the day they retire! The day that they truly become their own boss, the day that they can start doing all those things that they never found time for. But in truth, living to a ripe old age, can become a nightmare, for no other reason than afford-ability!
How many times have we seen someone unable to retire or having to come out of retirement, for no other reason than not having enough money to live on.
The ugly truth of retirement planning
Only about 6% of South Africans will be able to enjoy a financially carefree retirement.
Of that 6% about 60% are salaried.
You will need around 70% of your final salary as a MINIMUM income.
You need a lump sum of around 10 TIMES your highest annual salary at retirement.
After 40 years with the same company, you could retire on 60% of your final salary - a 40% DROP IN INCOME!
INFLATION in retirement is your greatest threat.
You could live more than 30 years in retirement, with NO SALARY!
Those who were able to, but didn't make enough retirement provision either decided at a early age they will work until the day they die or were worried about retirement, but always had something else to do or pay off, before they would focus on their retirement. 100% of respondent wished they could go back and correct that mistake.
Will you have enough money to live until the age of 90?
Retirement planning is about more than having a pension fund at work or taking out a retirement annuity. It is about having a comprehensive plan for what, when and how, for the day that you retire. The sooner you start, the better you plan will be.
Your plan should provide answers to the following:
At what age do I plan to retire?
How much capital do I need to retire comfortably?
How much do I need to save on a monthly basis in order to acquire the capital needed?
What instruments do I need to use to accomplish my goals?
What asset classes should I invest in?
How do I protect my nest egg?
Will all my debt be paid off by the time I plan to retire? If not, how do I settle my debts?
What will my tax liabilities be at retirement and there after?
Do I have an estimated budget for after retirement?
How will I handle unforeseen events and or expenses?
How will I provide for medical care?
What is my estimated life expectancy?
Where do I stand currently?
Start providing today, the longer you wait the worst off you are!!
