When the time comes for you to retire, will you be able to afford it? This is an important question many South Africans cannot answer. Saving for retirement is a difficult process that many people don’t take as seriously as they should. With limited income, higher living costs and tax hikes, it seems almost impossible to secure a financially comfortable retirement.
We have some tips that can help you manage your money more effectively to secure a better retirement.
#1. Work out how much you need
Generally, as a South African, you need to get about 75% of your income to retire comfortably – depending on your living circumstances and any outstanding debt you have. However, medical expenses often increase during retirement so you might even need more money to retire.
#2. Set up a savings plan
Once you know how much money you need to retire comfortably, set up efficient saving and investment plans to help you accumulate enough money. Most importantly, save as much money as you can as soon as possible. Every bit you save now will make a huge difference later on. And, never cash out on any savings accounts you can access before retirement. Make sure your money stays invested.
You may need to sit down with a financial planner to take stock of all of your finances and assets and work out a comprehensive saving plan.
#3. Be debt-free before you retire
Avoid unnecessary financial burdens during your retirement by becoming debt free before retirement, this includes paying off your home loan and credit debt. If you need debt counselling, contact Debt Rescue. This way, you can get a financial plan that will help you pay off your debt as soon as possible.
#4. Work for as long as possible
The longer you work for, the more money you will have for retirement. We’re statistically living longer than we used to and therefore need more money for retirement.
If you’re struggling to work, consider reducing your work hours before you quit your job.
#5. Get your health in order
Health complications can strain your finances during retirement so it’s crucial to stay as healthy as possible. Preventive medical care can go a long way in ensuring long-term health. Make sure you have excellent medical aid cover so that you do not become financially strained due to any unplanned medical complications.
You need to commit to a healthy lifestyle. This means that eating healthy meals, exercising, managing your stress and getting enough sleep should become your top priorities.
Get your debt paid off before you retire. Contact Debt Rescue for help!