Inflation is a key risk that needs to be factored in when examining whether you have enough to retire. Photo: Freepik

Inflation is a key risk that needs to be factored in when examining whether you have enough to retire. 

With future inflation an unknown - and impacted by variables beyond our control, such as the rand exchange rate - having a buffer is absolutely key, says Citadel advisory partner Kerry King.

Many people allow for a 4 percent increase in spending per year to account for inflation, but for many of our wealthy clients, their inflation rate is actually closer to 10 percent, meaning that they've had to dip into their savings more than they had originally anticipated.

* Is your pension/provident fund appropriately diversified? There are many companies that use life-staging analysis when performing retirement planning for employees and, as employees approach their retirement, an increasing portion of their pension or provident fund is moved into cash. However, cash investments do not offer inflation-beating returns over the long term.

Engage the services of a professional financial adviser sooner rather than later to check on your behalf that your retirement savings are appropriately diversified, and that your capital should continue to achieve real returns and growth above inflation.

* Outstanding debts. Another important point to consider is whether you have any outstanding debt that still needs to be paid. Monthly vehicle repayments, for instance, could eat into your capital very quickly. Concentrating your focus on repaying any debt before you retire could therefore make a huge difference to your monthly expenses and thus your draw from your pension fund.

* Future cash flow. While no one can predict how long they may live or how markets may change, a professional financial adviser should be able to identify whether you may be running out of money 10 or 15 years ahead of time, while you still have time to adjust your lifestyle and spending.

It can be extremely difficult to identify potential problems with your future cash flow yourself, and the chances are that you might realise you have a problem too late. That's why it's absolutely crucial to engage the services of a professional to do the calculations and necessary planning on your behalf, both before and during your retirement.

Kerry King is an advisory partner at Citadel

PERSONAL FINANCE