Hack your way to retirement 

Tips to help you reach your retirement goal.
Learning to cook and exercising can help put money in the bank, writes Ashton. Picture: Shutterstock

Have you ever really stopped to work out if you are actually on track to retire? It’s a fascinating exercise and one that can lead to much soul searching. 

Here is a fun exercise – try out a retirement calculator – and see what kind of results you get. 

For full disclosure, I plugged my numbers into that calculator and realised that I came out at roughly 38% of my retirement goal. It is not a perfect sum, because it doesn’t include my property assets but it does get me thinking about whether I can do more to put myself on track to retire. 

Why do I share the fact that I am so far off my retirement goal? 

I believe that one of the biggest problems we face is that we are emotional about money and don’t force ourselves to have hard discussions about the topic. Many people only really start discussing money-related topics when they are on the verge of retrenchment, are facing an insurmountable amount of debt or money has lead to problems in a relationship. 

If you can talk about money and financial goals, you can put yourself on track to achieve these goals. 

Understand that there are only two levers to pull

You can play with that calculator as much as you like, there are only two levers that can impact your retirement: 

– How much you save and for how long

– What your expenses are

This is absolutely critical. We can fool ourselves into talking about investment return but if our expenses exceed our income, we are constantly going backwards. You must get your expenses under control, it is critical. 

What if it is too late? 

The scary aspect of a retirement calculator is that it almost definitely shows that you’re never going to be able to retire… on your current expense base. 

I asked some of the top financial planners and personal finance speakers in the industry for a few hacks to get your expense base down and this is what they suggested: 

  1. ‘Choose your friends’ – It sounds mercenary but one of the biggest traps we find ourselves caught in is that we need to access credit so that we can simply afford to hang out with our friends. It is not just the rand cost now but the impact of negative compound interest. If you need money to impress your friends, you might have the wrong friends.
  2. ‘Exercise and not because it’s good for you’ – There is an inextricable link between your health and your wealth. If you get sick, you can eat into your savings and set yourself back quite dramatically… but if you find your expenses are too high because you’re spending too much time socialising, take up an activity like running. The exercise is good for you and you are not spending money trying to support social activities. 
  3. ‘Learn to cook!’ – One has only to look at the financial results from the various fast food restaurants to understand that South Africans want their food on the run. Have you ever added up how much that fast food is costing you? Cooking can bring it down quite dramatically. 
  4. ‘Your job is your greatest asset, make sure you are building a side hustle’ – Very few South Africans can survive without the guarantee of a monthly salary. Your salary defines the house you can afford, the ability to save and the amount you can spend every month. If you lose that salary tomorrow, what part of the income lever can you pull? If you have a sideline hustle, you can generate additional income to give you a buffer during the lean months. 
  5. ‘Just start’ – One of the best investment stories in South Africa is that if you had put R1 000 into a share like PSG back in 1998, it would now be worth over R1 million if you had consistently reinvested your dividends. PSG is a good story but it’s not unique and we have fabulous stories of wealth creation through the likes of Naspers, Coronation, Famous Brands and the listed financial services. The only way you can realise these gains is by starting. 

To leave you with a thought, go and Google the phrase “Warren Buffett Wealth Chart” – you will realise that one of the world’s richest men saw the majority of his wealth kick in as he neared 60. This is the miracle of compounding – every rand you take out of the expense column and move into the savings column, will ultimately start to compound – but you need the rands in place and the expenses low.  

Become passionate about beating the retirement calculator  and you will begin a life-long journey toward financial independence. 

Brought to you by Liberty.


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Using the calculator I am on 96% at age 60 (21 years from now)

If I delay to 62 it grows to 111%, and at 65 it’s 137%. A wow for compounding indeed.

Hi Marc, where can I see Liberty’s assumptions as a calculator is only as good as it’s assumptions. I would be interested to see Liberty’s fee assumptions and how different fees charged impact your ability to meet your retirement goal. Thanks Steven Nathan, 10X.

calculator needs some tweaks, it assumes 6% withdrawal, seems aggressive… and it can only calculate based on a max of R10m of assets – if you’re close to retirement that may be too little… guess you just cut off digits on the income and asset line. =)

thank you, good article. Interesting how delaying your retirement age helps in meeting your goal.

also the recommendations to reduce your expense base is also useful.

I mostly like the 5 “out of the box” ways of thinking about saving.

The calculator’s assumptions definitely aren’t clear. For example, what level of increase in the pension number does it allow for after retirement?
One hack should be to try and offload longevity, investment and other risk where you can. From about 20 years back when Defined Contribution + Living Annuities become the retirement norm longevity and investment risk moved to the pensioner. Plus it also somehow became a target to have the living annuity leave something for heirs. Even if you don’t go for a regular annuity one can at least offload some risk by buying a whole life insurance policy from somewhere in the middle of your working years and setting that aside for inheritance (plus assistance in the last year or two if it has dread disease accelerators). Then at least one can target a living annuity value of 0 on death – or consider a regular annuity for part of one’s retirement capital thereby offloading further longevity risk.
If you don’t follow Marc’s advice on exercise you might also be able to look for an impaired annuity at a much better rate!

I hate these calculators

I find them to be complete BS and extremely presumptuous that people will be good little sheep and deposit their little bits of cash into their pension funds every month in the hope that the nice little guy with a smile and a tie that they met with several years ago will take care of all their money as if it is his own.

I’ve seen too many people get completely shafted by this approach.

If you want a sustainable income at retirement, buy at least one investment property as soon as you possibly can.

That is the starting point.

You will thank me later.

End of comments.



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