8 tips to help you if you realise you can’t afford to retire

It’s widely known that the majority of South Africans cannot afford to retire comfortably and will have to reduce their standard of living at retirement in order to ensure they don’t run out of retirement capital.

However, as a result of a lack of savings or falling on hard times, some South Africans find themselves in a position where they simply cannot afford to retire and are not sure if they will ever be able to.

Take care of your health

If you have to keep working for financial reasons, bear in mind that your health is quite literally your wealth. Besides the medical costs that come with an injury or illness, time off work and the resultant loss of income can set you back financially.

Medical aid membership is essential, even if you have to downgrade to a more affordable plan option.

Taking care of your overall health is also important.

Look for alternative sources of income

Being fully dependent on a single income stream can be risky, especially in a stagnant economy. It might take some creative thinking and research, but it is a good idea to find ways to generate an additional source of income.

If you have a hobby or passion, consider ways of monetising your product or service.

Budget and cut costs

Undertake a ruthless budgeting exercise during which you interrogate each line item.

Are you living in too much house? Are you driving too much car? Do you really need that gym membership? Are you using DStv? Every cost that you can cut can be used towards building a nest egg and reducing the financial pressure you are living with.

Make a concerted effort to get rid of your debt as quickly as possible.

Speak to your children and family about your affairs

While you may recoil at the thought of becoming financially dependent on your adult children or a family member, if there’s a possibility that it could happen then you owe it to them to be open about your financial affairs sooner rather than later.

Insure important belongings

Make sure that your important belongings are adequately insured because if you are cashstrapped it might be difficult to replace a broken or stolen item.

Importantly, ensure that the tools of your trade are insured because without them you cannot generate an income.

Don’t take unnecessary risks or fall for investments scams

Very often people who find themselves in dire financial situations fall victim to investment scams and fraud. Be overly cautious of anyone who approaches you with an investment scheme that sounds too good to be true.

Chances are it probably is.

Use your pensioner discounts

Do your homework when it comes to pensioner discounts and then use them to your advantage. Many large retailers, shopping malls, restaurants and entertainment facilities offer favourable pensioner discounts – all of which can make a huge difference to your cashflow.

Get rid of deadwood

Get tough on adult children or other family members who are draining your finances. Continually supporting adult children who cannot stand on their own feet perpetuates the cycle of financial dependency.

Eric Jordaan is a director at Crue Invest

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