One of the main benefits that people look forward to once obtaining gainful employment, is a retirement plan.
I know it sounds weird, but hear me out.
Knowing that your company is going to help you out with saving for your golden years is a massive perk.
Not everyone has this benefit, though, which means that most people implement their own plans.
Unfortunately, simply putting money away every month might not be the best way to go about things, and a new World Economic Forum (WEF) report has found that people all over the world are outliving their retirement plans.
BusinessTech with more on that:
The report…found that strained government and employee retirement plans have left individuals increasingly responsible for their own retirement, while many find their personal savings to be inadequate.
“Retirees in six major economies should expect to outlive their savings by eight to nearly 20 years on average,” it said.
…The WEF found that most male retirees can expect to live past their savings by nearly a decade. And women for even longer.
Yep, up to 20 years of hustling once you’ve spent your savings. That doesn’t sound like a great way to enjoy your old age.
The report focused mainly on the US, the Netherlands, the UK, Australia, Canada and Japan, but that doesn’t mean that South Africa is exempt from this problem.
Experts have found that South Africans need to make provision for an additional 20 to 25 years if you are planning to retire at age 65.
With ageing comes many unwanted ailments. Having enough medical cover to keep you comfortable is essential in South Africa. Now imagine reaching your retirement age without having saved adequately and ending up on a state pension of R1,620 per month. From this amount, groceries, electricity, utilities and other expenses need to be paid.
South Africans should be looking at saving the equivalent of around 70 to 80% of their current income for when they retire:
This means that if you’re earning R40,000 per month, you’ll need between R28,000 to R32,000 per month when you retire. This equates to between R7 million – R8 million if you live to 85.
If like me, you had a mini panic attack when you read those numbers, help is at hand.
The best way to ensure that your retirement plans pan out is to get an expert involved in your planning and decision making.
Consequence Private Wealth believes that “the consequences of decisions made today will unfold over a lifetime based on the sound principles applied at their inception”.
In other words, they want to help you plan for your future now, so that you can enjoy the best possible financial outcome when you retire.
The sooner you start looking towards that future, the better.
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