When we think of our Golden Years, we like to imagine ourselves living comfortably, financially independent, being able to enjoy the simple daily things but also possibly travelling, picking up a hobby and so on. The sad reality is that many retirees in South Africa are struggling to meet the basic monthly expenses. A recent article in Personal Finance, based on research done by Glacier by Sanlam, in a report entitled ’Through the years’, identified planning and doing it well as the common theme amongst research respondents enjoying a healthy and fulfilling retirement.
The research focused on South Africans aged between 60 and 80 who had retired with a relatively comfortable monthly income.
Jaco Pretorius, CEO of Ensimini, a leading Employee Benefits provider, says while planning may sound like an obvious key to a successful retirement, doing it in practice is not always easy. “Respondents identified planning financially (and saving for retirement as early as possible) as well as planning to ensure good medical treatment and planning to enjoy the fun side of life as key.”
“What’s interesting to note is that four-fifths (82%) of the respondents who felt reasonably comfortable that they had enough retirement savings had used a financial adviser. We know that retirement savings are so important to financial wellness later in life but getting it right may require some help.”
“Drawing up a retirement budget, for example, is much easier in collaboration with a qualified adviser. They can assist you in selecting investments that will provide you with a sustainable income throughout retirement and help you diversify your investments so you minimise your risk. Regular reviews are important and if you are due a lump-sum payout from an investment or retirement fund, it is essential you consider reinvesting it. The reality is that investments just can’t keep up with inflation,” he says.
“It is critical that the financial component of retirement planning starts early in your career. Many retirees whose retirement savings are insufficient to meet their post-retirement needs, lament that they should have been made aware of the need to ensure sufficient savings from early in their careers and that they should have preserved their retirement savings when transitioning between jobs.”
“Leakage of retirement savings during job transition is one of the biggest reasons that so few South Africans can afford to retire. We encourage clients to include retirement planning as one of the topics in their new hire induction programmes.”
In the research, good health was cited as a second pivotal factor to enjoying retirement. “Health curveballs later in life can really deplete your retirement savings. Not only is the correct medical cover important but preventative measures like eating healthily and exercising regularly are also key.”
All the retirees interviewed agreed that meaningful connections were crucial to a happy retirement and this made up the third factor. Many were active in the community as ward councillors, teachers, tutors, consultants, members of police forums and volunteers. Pretorius says this type of positive interaction with like-minded people makes a world of difference as people age. It also contributes to the fourth and final factor – a positive outlook.
To move forward and make the most of retirement, the retirees said they needed to come to terms with and accept the past, and adopt a positive approach to the future. All of the retirees recommended having a clear plan on how to fill the days – some even suggested drawing up a daily schedule.
And although they take great pleasure in seeing their children and grandchildren, time with loved ones is only one part of the day-to-day lives of today’s retirees – contrary to popular perception that retirees are sitting around waiting for the younger generations to take a break from their busy schedules and drop in.
“You are never too old to find a new hobby, travel to a new destination or fullfill a lifelong ambition. People are living longer than ever today. The trick is to ensure one plans sensibly to ensure peace of mind later in life,” concludes Pretorius.
Prepared on behalf of Ensimini Financial Services by Cathy Findley PR.