The key to retiring comfortably does not solely depend on how early you’ve started saving; it is also determined by whether your contributions and return objectives are in line with inflation.
To beat inflation, Preenay Sathu, channel head for FNB Financial Advisory, highlights the importance of not relying solely on your employer pension scheme.
“Instead of solely relying on your employer pension scheme, supplement it with another retirement vehicle such as a retirement annuity. Another option is to diversify your investments by ensuring that your portfolio has fair weighting to different asset classes such as shares – while they may be volatile in the short term, shares are likely to produce higher-than-inflation growth in the long term,” she says.
Other asset classes to consider as part of the total investment portfolio are cash, bonds, property and commodities, which can be a combination of local and offshore. If you are fortunate enough to get a bonus from your employer, direct a portion of it towards your retirement savings on an annual basis.
“Like any other investment, it’s important to pay close attention to your retirement savings to avoid surprises when your working life comes to an end,” concludes Sathu.