Woman lives off R550 a month, stresses need for proper retirement planning

The City Times recently met with five pensioners who reside at Methodist Homes – Eddy House, all of whom said they aren’t living as comfortably as they would have hoped.

“Not one of us, I feel, has planned properly,” said Lorraine Coates (73).

“I don’t know if we didn’t expect to live this long, or what it is.”

Coates said she is unable to draw a state pension as she has a property on her name, which she is now in the process of giving to her children, in order to qualify for a pension.

Her son gives her R1 300 “pocket money” a month.

“The hard part about it is that I’ve been a very independent mother,” added Coates.

She said has to sometimes ask her son for additional money for unexpected expenses, such as money to purchase underwear, which is embarrassing.

Evadne Scrooby receives R1 200 a month, once her rent has been paid.

Her four children each contribute R1 000 to her rent at Eddy House.

“When we were young we thought a couple of R100 000s would be enough to retire on, today these kids need at least a couple of million, and who is going to have that?” asked Scrooby.

An 84-year-old resident, who did not want to be named, said she is optimistic despite having R550 available to her once her rent is deducted.

“That’s plenty,” she said.

“I’m managing fantastically, except that I do not have money for presents for my great-grandson.”

The resident admitted she lives a frugal lifestyle.

Esme Pieterse said she is grateful for what she has.

“When I lie in bed at night and everything is quiet, I lie there quite satisfied,” she added.

“When I lie there at night I think how lucky I am to have a bed and roof over my head.

“It is so wonderful and I am lucky to have got into Eddy House; I waited eight years.”

All five women said the youth need to save for their retirement from the moment they start working.

Grace Van Zyl, a financial life strategist and owner of Aspire Wealth Management, in Northmead, said people need to plan well in advance for their retirement and establish what their retirement goals are, such as:

• At what age do you want to retire?
• If you had to retire today, how much do you need to maintain your current lifestyle?
• Over and above your lifestyle expenses, you also need to decide what capital goals you are likely to have in retirement, such as holidays, vehicle replacements, hobbies, etc.
• Another important factor to consider is medical expenses, and what if you need frail care in your retirement?

Van Zyl said once you have a clear vision of what retirement is for you, you need to make a list of all your assets, liabilities, income and expenditure.

“A detailed budget will help identify how you are currently spending your money and highlight where you are overspending or spending on unnecessary items,” she explained.

“Once you have a clear understanding of your starting point you need to prioritise your goals (including retirement), based on the amount of income you have left to save for these goals.

“One of your goals should be to be debt-free by the time you reach your retirement age.”

She said people also need to get professional advice.

“Your financial planner should be able to provide you with a holistic financial plan and not just sell you a product,” van Zyl added.

“It is important that you understand all the costs and benefits of any investment you take out.

“Our recommendation would be that you appoint a fee-based professional financial advisor.”

Van Zyl said about 80 per cent of the clients she meets initially do have some sort of retirement savings and know that they need to be saving.

“However, many of them are not investing in line with what they want to achieve and have multiple products with multiple companies, thinking that “I don’t have all my eggs in one basket”.