DURBAN - You should be planning for your retirement from the first paycheque, but too often financial planning is put off until much later in life, leaving retirees with insufficient funds to fully enjoy their leisure years.
Phil Barker, managing director of Renishaw Property Developments, said there are ways to ensure retirement is not marred by financial concerns – and it’s never too early to start.
“South Africa doesn’t have a culture of saving, but it’s important to adopt financially prudent habits early on if you want to enjoy your retirement fully,” explained Barker. “These are supposed to be the golden years characterised by a hassle-free lifestyle of travel and relaxation. We want to ensure you get to this point, so here are a few guidelines to assist you along the way.”
1. Plan for inflation
Inflation is a fact of life and, too often, rising costs will cut into the buying power of your retirement savings. The ‘Rule of 72’ can assist you in planning for inflation. Basically, you take 72 and divide it by the expected inflation rate of the next few years to determine how many years it will be before the value of the money halves. For example, 72 divided by 6 (inflation percentage) is 12. This means that in 12 years, the value of your money will halve so you will need to save accordingly.