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Your finances in your 60s and beyond

Retirement time – time to reap the rewards of your saving.

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For many people, retirement is the big event that happens in their 60s – the culmination of decades of saving and planning. But being in your 60s or being retired doesn’t mean you can ignore money issues. Smart planning and sensible tactics are necessary to make your 60s as great as they can be, a time when you reap the benefits of your savvy 20s, 30s, 40s, and 50s.

1. Decide when you’re going to retire

Retiring is a big decision, especially as there is no mandatory legal retirement age in South Africa. Many companies have a set retirement age – usually laid out in your employment contract – while other companies have a strong retirement norm. Usually, though, people think about retiring somewhere between 55 and 65; South Africa’s old-age pension kicks in at 60 for people with a low income.

I’m going to assume your company isn’t rigid about the retirement age and you have some choice in the matter. When deciding when to retire, consider the following factors:

  • How much have you saved for retirement?
  • How much income do you need?
  • How much income can you expect to generate from your savings?
  • Are you ready to leave the workforce?
  • Is your spouse ready to retire?
  • Do you want to retire completely or work part-time?

The best thing to do is a financial review with a qualified financial adviser. Determine how much capital you have and what options you have for income-generating investments. Some people choose retirement annuities to provide them with a retirement income, others choose a mix of different assets, and some continue to invest a portion of their capital. Remember that you may need to live on your retirement money for 20 or even 30 years, depending on your health, so be careful in your planning.

Many people also choose not to retire completely if they are still able to work. Depending on your job and skills, you may be able to find part-time work, or do consulting or project-based work. This can also keep you busy and interested in things – proven to boost happiness and mental activity.

And if your spouse is also retired, you may need to have a discussion about spending so much more time together!

2. Downsize and right-size

Your 60s is the ideal time to downsize. Your children are probably grown by now and leaving home, so you can move into a smaller house. If you are no longer working, you can also consider moving to a cheaper city or town. And if both you and your spouse aren’t working, you may be able to manage with just one car, saving money on insurance and car payments. Be aware of your spending and look for ways to cut back on non-essentials.

You should also take this time to review your insurance portfolio and check that your coverage is still appropriate for your needs. With your children grown, perhaps you can alter your life cover, or with a new, smaller home, perhaps your home insurance needs have changed. Chat to your insurance agent and review all your policies. Finally, look over your will and do some estate planning now while you’re in good mental health.

3. Plan for your retirement fun

In my experience, people spend lots of time planning for the financial side of retirement and not enough time thinking about what they want to do when they retire. It’s easy to fall into a rut when you no longer have to be at the office, so make concrete plans to do things you enjoy, see friends and family, and travel.

You should also look after your health. Your 60s is when the difference between people who have taken care of their bodies and people who haven’t starts to show, so eat well, exercise, manage your weight and deal with stress. After all your hard work, you deserve a relaxing and fun retirement – and part of that is good health.

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