What to consider when planning for retirement

Preenay Sathu, head of financial advisory at FNB, said that they encourage consumers to start saving for retirement as soon as they start earning income.

Long-term thinking is encouraged when looking at retirement planning and the benefits thereof, the Brakpan Herald writes.

There are factors to consider when planning for retirement:

Age

While the retirement age in South Africa is 60 years, there are people who prefer to retire early (minimum age 55) so that they can travel or dedicate their time to non-profit organisations or simply spend time with their family. Taking these plans into account will help you ensure that you save enough to allow for comfortable retirement.

Debt

It is not advisable to rely on your retirement payout to settle debt. Your retirement income should be dedicated to sustaining your lifestyle and covering your daily living expenses. Settling your debt before your retirement is a critical step to ensure that you retire comfortably.

Monthly contributions

You need to ensure that you contribute enough to retire comfortably. Speak to a certified financial planner who will guide you to structure your retirement plan in accordance with your lifestyle and needs.

Financial discipline

To be able to achieve your retirement goal you have to be financially disciplined and have long term thinking. Investment returns and growth will be greater over the longer term thus allowing for greater opportunity for consumers to reach their retirement goals.

Retirement fund

For individuals who belong to a company pension or provident fund, it is advisable to still invest in a retirement annuity to strengthen your retirement income. Retiring with a healthy pension or provident fund and retirement annuity will help to boost ones retirement savings which will be used to fund individual retirement needs

Review your plan

An annual review of one’s retirement plan is vital to long term success. However, in addition to an annual review individuals must review their retirement plan when there is a change in circumstances such as marriage or divorce, new born child, purchase of property, sale of assets and change in legislation.