File Image: IOL
File Image: IOL

Now is the time to rethink and recreate your retirement plan

By Vernon Pillay Time of article published Aug 16, 2021

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Increased global longevity is giving us all more years of active health and possibly a longer retirement. According to the World Health Organisation (WHO), global life expectancy at birth has risen by six years. In South Africa, research from retirement income specialist Just SA shows that the average 60-year-old male will live to 82 and female a further five years.

But within current economic and political constraints, how can South Africans approaching retirement make these extra years count for more than just ‘bought time’? At a recent 50 Plus Skills webinar, CEO Lynda Smith suggested that those entering the second half of their life use this opportunity to re-create themselves and in doing so, rethink their retirement.

“As you approach retirement, effective financial planning can enable a better later life,” agrees Just SA CEO Deane Moore. “But instead of just adding years to your life, you should rather aim to seek and finance more life for your years.”

In the webinar, author Nikki Bush spoke of the importance of the right attitude to navigate life’s transitions and manage crises. She urged listeners to be curious, rather than fearful, of the unknown and to harness the playfulness of one’s inner child when confronting change, in order to open the door to new possibilities and opportunities.

Strategy and Culture Consultant Niven Postma warned of being caught up in mind traps when faced with complexity, while Corporate Wellness Trainer Carine Fraser recommended mindfulness practice such as walking in nature to alleviate stress, improve emotional regulation and everyday life satisfaction. Similarly, a return to nature for healing and nurturing and to promote longevity was encouraged by herbalist Sandy Roberts.

Noting the resonance of this advice with financial planning, Moore wonders if the same attitudes can be used to face finances in retirement. “When planning for retirement,” he asks, “can you let your curiosity be greater than your fear? Can you see your finances as an exciting adventure to be curious about, rather than fearful of?”

He similarly calls out the role of mind traps in financial planning, admitting that it is very easy to get caught up unnecessarily in a negative mindset, especially when making big decisions that will impact your future comfort and well-being. “Try to avoid behavioural bias which may result in you taking financial actions that make your life harder, rather than easier, in small or extreme ways.”

According to Moore, a fundamental requirement for a comfortable retirement is to have a financial anchor – a guaranteed income that covers your essential expenses no matter how long you live. “You don’t want to be betting on dying early,” he says, “especially as you incorporate new, holistic practices that promote longevity and a good quality of life.”

Those who are fortunate to have a secondary pot for excess savings, should be able to use this to cover discretionary spending or treats.

Moore concludes: “As you live your life holistically and in inspiring ways, we urge you to make your finances part of the exciting adventure, and recommend that you speak to a trusted, financial adviser to enable you to rethink retirement and live out your second half of life to the fullest.”

PERSONAL FINANCE

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