The good news is that 60 is the new 40, and, if you have looked after yourself, there is a solid 15 years of work still in you. What has this got to do with retirement planning, you may ask? Everything! Almost from the day you start earning a decent salary, the mantra of the financial services industry is drummed into you: ‘Save your money or prepare yourself for cheap coffee and a dingy bedsit in retirement.’ The rule of thumb is that you have to save 20% of your salary for 25 years in order to support yourself when you retire. That is fine, in theory, but many of us only get into gear in our late 30s to early 40s, just when we have three kids, half a dog and a picket fence to pay for, and did I mention having to pay off debt that equals the economy of a small country? So, retirement savings is often relegated to the nice-to-have category of spending, while the Lotto-ticket spending ratchets up. But, don’t worry, you can dispense with the supersize tub of ice-cream, though; the good news is that we are living longer, healthier lives, and this means that we have more time to save.

 

A Retirement Game Plan

In view of this information, let’s take a look at your game plan:

 

• The first hurdle to jump is your money mind-set. If you are defined by your ‘stuff’ and your self-worth is determined by the size of your designer shoe collection, take some time out to understand why you feel that you need material things to be accepted, loved and admired. The people who love you will not recoil in horror if you wear Jimmy Cheaps, and the people who don’t care about you – well, they don’t care. So reel in the spending.

• Take some time to see a financial adviser; he or she will give you some really good advice on how and where to save. In fact, your financial adviser will become your new best friend after you have overcome the initial shock of finding out how much you will need to save.

• Lee-Ann du Toit, Head of Client Management at Momentum, says: “Financial wellness and the process of retirement planning are not merely about crunching numbers; it is about getting the lifestyle you want. The focus should be on the positive things you can do with your money rather than the consequences of not having enough. This change in mind-set acts as a positive motivator towards your goals.”

• Get rid of short-term debt, because it eats up your disposable income like Pac-Man on steroids.

• Make sure your risk insurance is comprehensive. Lee-Ann explains: “Buying what looks good at the time without a formal strategy can leave you vulnerable. Your current state of financial wellness can be affected by unforeseen circumstances, like a car accident or disability. It’s all very well to have a stash of cash in your retirement fund, but a financial calamity like a car accident or disability can eat up your reserves.”

• It is vital to keep your will and last testament up to date, and, even more important, to ensure that your partner’s will is in order, especially if you are relying on him or her – but, hopefully, you are not – for retirement funding.

• Spend time thinking about how and where you would like to retire; your funding will vary according to your aspirations.

• Make sure that you and your partner have discussed retirement; he or she may have a two-roomed shack on the beach in mind and you may be thinking: “Villa in Spain, darling.”

• Think about the type of work you would like to do after you step off the corporate hamster wheel, and slowly build up skills and contacts in that arena.

• If you are nearing retirement, speak to your boss or board about a phased retirement plan that allows you to work fewer hours for less pay. This should be a valuable proposition for them, because 40 years of skills and intellectual property will be sorely missed.

 

 

 

Iona Minton is a financial education consultant and a professional speaker on the subject of building wealth. She is the author of two bestselling books, Financial Fitness for Women, and The Property Game. Iona is also a content strategist, assisting organisations to implement value-driven and media-friendly content across all platforms.