Retirement is perhaps the most misunderstood stage of our lives – we normally think of it as a time to settle down when we’re too old to work. But what if you were to imagine it as the next big adventure in your life, a coming time when you can attempt the things you really wanted to do when you were so busy focusing on your career and raising families?
Daphne Rampersad, Investment Advice Product Owner at Liberty, believes it’s time to change the way people think about their futures.
“The mindset around retirement planning has to change. We used to ask: when I retire, will I be okay? But it needs to be more than that. We should be asking: Will I be happy?” In 2020, the South African Retirement Reality Report revealed that 49% of South Africans don’t have a retirement plan, and 75% of the people who do, say they are concerned they may not have enough to live on when they retire.
But retirement planning shouldn’t be a cause of anxiety because it’s never too late to build towards your future.
Approaching retirement from different life-stages
“Your age doesn’t matter. The planning isn’t about building up to a lump sum. It’s about finding the answers that will help define your future. Maybe you want to retire early. Maybe you want to travel. It’s entirely up to you, and that’s not scary, that’s exciting,” says Rampersad.
Regardless of your stage in life, Rampersad says that there are always interesting questions to ask that can make your journey towards retirement an adventure.
Your roaring 20s, time to dream big
In your 20s, you’re just getting started with adulthood. You might be finishing up your studies, looking for work or already starting your career. The question is, what do you want to do – even in the near future? “Young adults shouldn’t look at retirement as an ‘event’. Saving towards a retirement fund shouldn’t be seen as an obligation, rather a means to an improved, fun and adventurous lifestyle,” says Rampersad.
“Sometimes, people have more fun with the planning and waiting for their big holiday than on the trip itself. Planning and saving for retirement is the same. Imagine what you can do if you’re financially prepared for your future,” she says. Retiring early, using your retirement savings to start a new business, buying the things you want, starting brand new community initiatives. The possibilities are endless. Starting your retirement fund early also means you get the benefit of compound interest, which means your fund will increase over a longer period, meaning you can invest smaller amounts as you start growing your pay-check.
Enriching your relationships in your 30s
Most people are still developing their careers and families in their 30s, but this is a time when you may be asking which relationships you want to cultivate as you get older. You want to ensure that your finances allow you to do this, whether it means having enough money to travel to see relatives and friends, protect your immediate family from financial burdens or even re-investing in the communities you love.
“This shouldn’t be approached as some complex cost exercise. This is the point where you can prioritise the people around you, and it’s important that your retirement planning at this stage of your life comes from a place of care,” says Rampersad. Retirement annuities and investment plans are flexible, which means that even if your priorities change, you can find a way to balance your family’s needs with a fun, exciting future. Not worrying about your future-self’s finances means less stress and more time to focus on other projects.
Re-engaging with your purpose – or finding a new one in your 40s
As you settle into your 40s, maybe you’re still hustling. Maybe you’re already established. But what’s important is finding satisfaction in what you do. Planning for your retirement at this age is an opportunity to re-examine your purpose, remembering what’s most important to you.
“Retirement isn’t a line drawn in the sand. It could be the time when you make new goals, like taking the time to build a new business using part of your savings and retirement fund earnings, travelling, or educating yourself. It’s not the end of a chapter, it could be a whole new story,” says Rampersad.
Even if you’re not entirely happy with your current circumstances, there’s always time to invest and save towards a new goal.
Whatever your age, you don’t have to do it alone
It doesn’t matter how old you are: financial planning shouldn’t be something you have to do by yourself. Trained professionals are out there to help you. “Financial Advisers aren’t just number-crunchers, they’re people who can give you the objective, meaningful advice you need to transform your life, regardless of your financial situation,” says Rampersad. “So, when you’re planning for your retirement, they’re listening to what you want and will help you put together solutions so you can make your vision a reality,” she says.
This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.
Liberty Group Limited is a Licensed Insurer and an Authorised Financial Services Provider (no 2409).