A guaranteed income for life and leaving an inheritance for loved ones are two of the most important motivators South Africans list when they reach their golden age.
This is according to Just Retirement Insight – independent research commissioned by Just – in which South Africans between the ages of 55 and 85 years in the major metropolitan areas were interviewed.
When it comes to income in retirement, 89% of survey respondents wanted a guaranteed income for life (up from 86% in Just’s 2015 survey).
The second most important aspect for 53% of respondents (up from 44% in 2015) is leaving an inheritance for their children and grandchildren.
However, statistics from the Association of Savings and Investments South Africa (Asisa) show that 92% of retirees currently invest in living annuities, which do not cater for both needs as these products typically do not provide a guaranteed income.
This, unfortunately, means that running out of money becomes a possibility in later years and, as a result, the likelihood of being able to leave a legacy is severely reduced.
However, there are unique retirement solutions which seek to address both these needs simultaneously.
But it is not just the paperwork that has to be filed and reviewing the expected income in retirement to ensure a smooth transition. A dramatic change in lifestyle from working to not working comes as a shock to some. If you’re in the early stages of retirement and feeling somewhat lost, you’re not alone. Many retirees find the transition can be difficult.
Following these tips might help you adjust to retirement better so you can feel fulfilled and happy during this chapter of your life.
Retirees who want to retire on very little or no money are greatly benefited by learning budgeting skills. Whether retirees have only a few hundred rands or tens of thousands of rands, they should make detailed plans to allocate what cash they do have to the things that matter the most.
But prior to that it is also advisable to remain working as long as possible, retiring at 55 or 60 is simply not advisable anymore. So many people get their identities wrapped up in what they do for a living, and once that’s gone, if there isn’t anything else there to fill the space, that’s when depression and dissatisfaction often kick in.
People who are willing to sit down and discuss their passions and long-term post-retirement goals are the ones who will have a more satisfying, fulfilling retirement. You can’t just leave work and go figure it out.
Without the human interaction and challenges found at an office or workplace, some people suffer mentally and physically. If you’re not working, you may not be engaging in conversation with people daily or getting enough physical exercise.
It is important to take care of your health, in view of higher medical care costs and expected ailments as you get older. The healthier you are the less you need to provide for medical costs.
You must be cautious that you’re still getting out, meeting people and being social. People who are not active tend to decline rather quickly.
Retirees need to find hobbies that interest them and maybe produce goods and/or services that can be sold. Even if retirees don’t make much money from their hobbies, the little money that they do earn can be allocated toward something important.
What is going to motivate you to get out of bed and do something? It’s going to be different for everyone, but do find something that motivates you, excites you and keeps you moving forward.
Also, research and use the many benefits and promotions available to retired persons. It is a waste to miss out on any available discounts. For instance, pensioners can go to the movies for reduced ticket prices on certain days, enjoy lower prices at certain retailers, even some hairdressers and dentists have special offers for retirees.
Many banks are more generous with interest payments on certain savings plans for the older guard and additional tax allowances are available on income earned. Furthermore, some public services like bus rides are also available at reduced prices.
Financial advisors actively advocate the importance of having a financial plan and investment strategy in place while working. Once retired adapted plans and a new life strategy are as important. Want to know if your retirement plan is on track? Consult a qualified, accredited advisor. Details of our offering here: Brenthurst Wealth retirement planning.