SENSIBLE INVESTMENT
LOOKING AFTER YOUR RETIREMENT INVESTMENT
Will you be working past the age of 60 or 65? By Zukiswa Sonjica, Financial Paraplanner- NFB East London.
For individuals under the age of 30, retirement may seem a long way off, and definitely not worth worrying about right now. Recent studies, however, have revealed that the younger you are, the higher your chances of living to 100 years of age.
40.0 %
30.0 %
20.0 %
10.0 %
Odds of Living to 100, By Year of Birth
Graph sourced: discovertheodds. com / what-are-the-odds-of-living-to- 100- accessed 26 / 01 / 2017
1940 1960 1980 2000 Male Female Both Sexes
This research forces many to face the likelihood of working past the age of 60 or 65, and to ensure enough retirement capital is available to provide income for the forty or fifty years after what we currently consider the normal retirement age of 60. Should the retirement capital not stretch that far, will employers willingly take on older employees and pay them adequate salaries to meet their financial needs- even with compromised health that could affect productivity and efficiency levels? With these facts to consider it becomes clear that retirement capital is, and will continue to be, an asset to which closer attention must be paid.
Here are a few ways to look after your retirement savings:
Getting Started and Sticking to the Plan: like many resolutions to do better and act wisely, one starts with good intentions, but may lose focus along the way. Enlisting the help of a financial advisor to determine your starting contribution amount and the percentage increase of your contributions is the initial step to ensuring sufficient retirement capital. The next step is sticking to your plan and making sure you are on track year after year. Should there be a break in employment due to retrenchment, maternity leave or unemployment, then your strategy will need to be revised accordingly.
Correct Asset Allocation for your Life Stage: when employees join companies they are given the opportunity to choose the fund allocation of their retirement investment. Most employees do not have a clear understanding of the impact of choosing funds for their retirement fund, nor do they remember to revise their original position at different life stages. Many have fallen into the convenience of overly conservative default options which is a costly mistake that people are not even aware they are making.
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Preserve funds till Retirement Age: when changing employers, many people fail to preserve the funds for the intended purpose. They would rather dip into their retirement savings prematurely, taking the pre-retirement tax hit and foregoing the years of
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