As a baby boomer, you’re part of the largest, healthiest and wealthiest generation … but just how sound has your retirement planning been? Read about the common mistakes we make and why it’s never too late to save.
Make your retirement planning a BOOMing success
If your fifties are supposed to be the new forties, what’s the fuss about retirement planning at this stage of your life? Like wrinkles and middle-age spread, there are things you can do to keep retirement at bay.
Like most things in life, there are the facts as we believe them … and then there is reality.
My fact: You may be moving into the platinum generation, where hair and card colour collide, but you still feel as young and productive as the Generation Xer down the corridor.
Reality: You’re in baby boomer territory, a space occupied by those born between 1946 and 1964 and the largest, healthiest and wealthiest generation. Ironically, it is also considered the generation that is totally unprepared to finance the decades ahead once they retire.
My fact 1: I can afford to retire
Reality: According to the 2011 Old Mutual Retirement Monitor Study, most people are contributing too little to their retirement savings. On average we save about 8% of our salary, whereas informed opinion says we should be saving between 15% and 20% of our net salary.
Solution: Once the kids leave home, channel extra money into a savings option with great rates, such as Nedbank’s OptimumPlus Fixed Deposit, a Nedbank Retail Bond or an EasyAccess Deposit. Or make use of an investment option, such as Guaranteed DreamMaker, which protects your capital.
My fact 2: It’s impossible to retire debt-free
Reality: Debt is the last thing you want to have at retirement. If possible, settle all your debt five years before you retire. Some of us may set aside the money we have been spending on our children’s education to supplement retirement savings. Others may have to lower their standard of living to cut costs and divert funds into saving mechanisms.
Solution: Install Nedbank’s Personal Money Manager on your computer and it will be like having your own personal financial manager at your service 24/7. You can track where your money is going and find ways to save money where it counts the most. It can help you plan better, pay off debt faster and even help map your future.
My fact 3: I don’t need more advice
Reality: In the same Old Mutual retirement survey 62% of fund members felt poorly informed about the current value of their savings. Review your existing retirement plan or establish a financial plan that suits you and your circumstances.
Solution: A Nedbank financial planner will:
- look over your goals and help you establish a list of wants versus needs;
- examine your budget and advise on where you can make any changes to improve cashflow;
- speak to you about retirement solutions and enhancements because, at this stage, your employer’s pension fund will not be enough.
My fact 4: My life’s sorted
Reality: Once the sums make sense, turn attention to the finer details of your affairs and look closely at the loose ends that need tying up. This means having a will in place, including a living will, contributing towards a funeral plan and generally ensuring your estate is as tax-efficient as possible to protect your beneficiaries.
Solution: You can get a funeral plan from Nedbank from as little as R19,50 a month, with options to cover only you, or your whole family – even your parents and parents-in-law. The Premier Funeral Plan (for R85.00 per month) even offers a monthly grocery, retrenchment and disability benefit to the family when the policyholder passes on, is retrenched or becomes disabled.
Need more facts on retirement planning?
Speak to a Nedbank financial planner or your banker at your nearest Nedbank branch.