Five ways to plan your retirement

Reconsider your finances

You have been planning your retirement for years, but if something has hurt your savings, it may be time to reconsider.

“It’s important to understand that finances are only one component of retirement, and while health, happiness, and wealth are important prerequisites for a fulfilling retirement, they are interrelated and finances shouldn’t take precedence over your wellbeing,” says Alan Botha, a director and asset manager at Juergens Group.

“Planning, evaluating and regularly updating your retirement plan with your financial advisor is important, but a retirement plan must have a holistic view of the person and have built-in flexibility to ensure that it is robust enough to withstand ongoing changes in ‘life’ cope with what happens’.

A shift in awareness about income, not investment, needs to take place, with essentially three categories of income needing to be funded:

  1. Minimum pension income for the bare minimum (monthly budget), conservatively invested.
  2. Flexible income requirements to finance your desired lifestyle, moderately invested
  3. Nice to have what could be invested more aggressively

Choose the right medical device

“Your medical care is extremely important because you are the most likely to be actually using the services you paid for,” says Alan. “You need to understand the benefits and limitations of your health insurance plan well and should add a blanket to ensure that any unpredictable self-payment gaps cannot be financed from your retirement assets and thwart your retirement goals.”

Think about long-term care

“The effects of medical and technological advances suggest that we will all live much longer, and therefore it is important to plan for long-term needs and ongoing care, especially in South Africa where families are spread around the world” advises Alan. High care and nursing homes are extremely expensive and this planning needs to be factored into a well thought out and thoughtful retirement plan.

Prepare to shrink

“Housing and medical care are the most expensive household items for most households. Your home is probably your most valuable asset too, so optimizing your living space to get the most out of your retirement plan is critical to your success in retirement, ”says Alan. Whether you’re still paying a security deposit or you’ve paid off your home in full, now is a good time to check out a smaller home and settle in the area where you plan to retire.

Visualize your future

“You want to have a meaning and purpose in your life, experience things that have an impact and bring joy to others, get inspired and try new things, do something unforgettable and always keep a wider perspective in mind that retirement is not the end, but a signal for a new beginning with unrestricted decisions, ”comments Alan.

Studies have shown that retirees who don’t have a particular hobby are more likely to experience depression. Hence, it is important to build new relationships within your community and new hobbies.

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