Retirement ..... decisions, decisions!

By Martin de Kock CA(SA) CFP®
Director of Ascor® Independent Wealth Managers

 

For many people retiring is a daunting life transition. It is all the more daunting if you have not saved enough for a comfortable retirement. There are a myriad options that need to be considered and decisions to be made. Unfortunately some of these decisions are irreversible once made. For this very reason it is advisable to make use of the services of a certified financial planner.

 

For purposes of this article I cannot embroider on the various considerations.

 

Considerations at retirement:

Tax – by structuring your monthly income requirement properly you can avoid paying unnecessary tax. This assists in making your capital last longer during retirement.

 

Emergency fund – you need to put funds in a savings or money market account for unexpected emergencies. These funds need to be accessible at short notice.

 

Budget – as you no longer earn a salary during retirement your ability to build capital is limited or not available to you. For this reason you need to budget properly so that your capital lasts throughout retirement.

 

Longevity – if you have a history of longevity in your family chances are you will also live longer during retirement. Plan for this. Due to medical technology life expectancy is increasing all the time.

 

Debt – if at all possible avoid going into retirement with debt. Paying interest is an expense you get no value for. Also undertake to make no debt during retirement.

 

Credit cards – reduce the credit limit on your credit cards when you go into retirement to avoid getting into trouble. Credit card interest is usually very high.

 

Last will and testament – ensure that your last will and testament are up to date and inform heirs of the content of the will. This could avoid unnecessary squabbles after your demise.

 

Pension discounts – do not be too proud to ask for pensioner discounts at a shopping store, short term insurance, entertainment etc. Every penny saved is a penny that can grow and you can spend later.

 

Work longer – most people still have much energy at retirement as well as a wealth of experience. Consider consulting in your field of experience to earn a little extra so that you draw down less on your retirement funds. Having something to do and wake up for also enhances your sense of purpose.

 

Hobbies and charities – many people going into retirement become depressed as they feel their lives have no meaning any longer. This is an ideal time to get involved with a charity close to your heart and giving back to the community. Join a book club – keep the friendships going and build new ones.

 

Retirement products – there are numerous products that can be bought and utilized before and during retirement. These include money markets, unit trusts, retirement annuities, guaranteed annuities, tax-free savings accounts, retail bonds etc. Speak to Ascor to assist you in making the right choices when acquiring these products.

 

Retiring is not for the faint-hearted and it helps having someone qualified to accompany you on this journey of the unknown. Retirement is a marathon and not a sprint and you need a coach to guide you and walk or run the road with you.

 

Read more about Ascor® Retirement Planning Services

 

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