Oh, Sh**t, I am 40 or even older – and it hit me:
I do not have enough to retire on. What now?
Committing to making sure you have adequate plans in place to be financially independent on retirement is important, but a lot of us only realizes this late in life. This is understandable. When you are younger, we believe in the eternity of youth and our endless potential. But the fact remains: one needs to save at least 10% of your income from a young age towards your retirement. And if you started later… well then so much more. It is commonly believed amongst some advisors that for every R1 mil you have at retirement (age 65) you can earn R5000 per month
This is all good and well. But what now? I am past the halfway mark in my career, and I know I have not made enough provision.
Good news: there is hope.
Let me show you how:
The key is to start NOW and not postpone any longer. I propose some relatively easy steps to maximise your committed savings.
Make yourself a priority. Often, we are contributing to children funds, parents and more, ignoring the fact that we are our own first responsibility (if you fail to do that, you will become someone else’s responsibility!)
Maximize your retirement contribution. You can do this through your pension fund contribution or by stating your own new Retirement plan. The advantage of a personal Retirement plan is the flexibility as well as the fact that you do not need to change it if you move your job.
Do proper tax planning and invest the tax return wisely – in your retirement plan or maybe in a fixed investment that would show decent returns in 5 years.
Plan to stage your retirement income: Contribute to a retirement plan to which you can invest longer and only get the benefits later – say from age 70 onwards.
Plan on earning a smaller or passive income after 60 and even 65. Life expectancy is higher now than ever, and quality of life allows us to contribute linger to society.
Review your plan regularly
These are but a few alternative to address this ginormous elephant in the room. Remember It is your life. It is up to you to make it better.
Talk to me if you are interested in a more quantitative approach to your personal and unique situation. I can definitely make a difference.
