We all look forward to kicking back during retirement and enjoying the fruit of our labour in our golden years. The golden years: Retirement banking you can bank on.

We conjure up scenes of sitting on the porch, feet up, beverage in hand, watching our grandchildren (or our pets) play in the front yard, without a worry in the world. Or finally travelling or taking up hobbies (whichever way you are inclined).

The stark, statistical reality however tend to burst these big dream bubbles for most South Africans.

According to an article published by the Daily Maverick:

‘‘A key issue that crops up often in retirement research is mounting financial pressure, which is preventing people from saving enough or at all for their golden years. Findings aligned very closely with a widely quoted National Treasury statement that only 6% of the country’s population was on track to retire comfortably.’’

This is a catch 22 situation that requires education, guidance and advice concerning when, how and how much to save for retirement, especially if you are barely able to make ends meet on your monthly expenses.


 Track your income and expenses

We often spend more than we have, simply because we don’t keep a record of our spend versus our income. Budgeting is such an important life-long discipline to maintain. Firstly, it can help you to stay within your financial means by not spending more than you earn. Secondly, it might shock you to learn that there are actually areas in your spending that can be adjusted to make room for including consistent savings in your budget. That daily sarmie or coffee you are buying for lunch, or your maxed-out clothing accounts might just have you reconsidering some of your spending habits.

Consistent saving to beat inflation

Monthly savings (especially saving for retirement) should become a habit as soon as possible, like brushing your teeth twice a day. Decide on a monthly amount you want to or are able to save, and have it debited from your account around the same time you get paid.

Hiding your cash under your bed is not a good option when it comes to retirement plans. You need to invest in a retirement annuity to benefit from compound interest and growth (which is best achieved over a long period of time).

‘‘The best time to start saving for your retirement is when you land your first permanent job. The second-best time to start is now.’’

With the right investment product, you could comfortably double your savings investment over a period of 20 years.

Review your investment and goals

It is important to review how much you are investing into your retirement savings regularly. Life-changes (like children leaving the nest or paying off house or car debt) are good opportunities to use that extra monthly income to invest more into your retirement funds.

‘’Actuarial models show that a good rule of thumb is that 12 times your annual salary is likely to buy you a financially comfortable retirement.’’ – Peter Doyle, former president of the Actuarial Society of South Africa

But even if you have a mere R500 to start with every month, don’t let it discourage you from starting. Once you are financially in a better position, you can increase this amount.

Speak to an expert

A reputable and registered Financial Services Provider, such as Springpoint Finance (FSP No. 43870) can help you to assess your financial goals, map out a plan and ensure your money is invested with a retirement product that is best suited to your individual needs. We partner with reputable retirement product service providers such as Old Mutual, Brightrock and Momentum.

We also have a revolutionary and time-saving tool to help you check and compare your existing policies and investments.

Simply visit Verifi, complete the simple form, and we will send you a free comprehensive report on your existing policies and investments. Should you require further assistance with updating your policies or if you would like to explore additional options, our friendly and highly qualified financial advisors will be happy to assist.

Learn more or get in touch at: http://www.springpointfinance.co.za/contact/

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The information contained in this article is of a general nature and intended as a guide only. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial, legal or other issue. We recommend you consult a financial planner/advisor to take your particular investment objectives, financial situation and individual needs into account.