Never too late to start saving
I’M 50 AND NEVER PUT AWAY
Areader says: I’m a 50 and only recently got a permanent job. I’ve never had the luxury to save for my retirement and want to contribute R800 to R1 000 a month to a fund. Is this still possible?
Sonia du Plessis of Brenthurst Wealth responds.
It is never too late to start saving towards your retirement. Realistically though, you’ll not be able to retire comfortably at 65. If your health allows, you will have to work past the age of 65. You will have to prepare yourself for that and know that you will have to try and work as long as possible.
I would recommend that you save the R800 to R1 000pm in a unit trust-based retirement annuity (RA) vehicle. I’d also strongly suggest you add an automatic annual premium increase of at least 10% to 15%. If you have saved up some funds you can consider starting your RA with a lump sum to give your savings a boost.
Have a thorough review of your budget; see if you can’t save more towards retirement. This will mean you’ll have to cut unnecessary luxury expenses, eg DStv, eating out and beauty treatments.
I’d also advise that you contact a financial advisor. They will be able to assist you with your retirement planning and make sure you are not making unnecessary financial mistakes.
You are in a phase of your life where you can’t afford to make errors with your money and will have to make it a priority to at least review your financial situation once a year.
A financial advisor will also be able to assist you with the unit trust selection for your RA. It’s important to be comfortable with the amount of risk being taken within the product and to understand the positives and negatives – Moneyweb