The Citizen (KZN)

Three sure signs that you are ready to retire

- Frank Walsh Walsh is franchise principal at Pathway Wealth Solutions

As government moves to lower the retirement age of state employees and the cost of living continues to make us all quiver, many clients come to me with this question: am I financiall­y ready to retire?

It’s a heavy question because of the number of unknowns in an already complex equation.

How long will I need my money to last? Will my circumstan­ces change? Can I rely on my health?

Here are three ways to know for sure that the time is right.

1. Be as debt-free as possible

You don’t want to pay car or bond instalment­s in retirement. The same goes for store credit and smaller bank debts. These are big expenses and can be severely impacted by the interest rate.

You can use part of your retirement payout to settle debt and move on without it. If you’re hoping to retire soon, start chipping away at your debt.

2. Have contingenc­y planning

It’s important to have medical and gap cover, life cover and short-term insurance so that when the going gets tough, someone else pays to get it going. Don’t be tempted to reduce your cover to “save” money in retirement.

3. You’re prepared to make small sacrifices

If you’re feeling like retirement needs to happen yesterday, then you may need to consider your priorities.

Can you see yourself without all those streaming services and takeaways?

Retirement is often best enjoyed when it is simple.

Small sacrifices can cut large chunks out of your monthly budget and allow you to retire sooner rather than later.

To pave your way to retirement in the short to medium term, consider how you can lower your debt and unnecessar­y spending as early as possible.

Better yet, if you are reading this well before retirement age, you’ll want to start putting a long-term plan in place now lest the millennial penchant for a side hustle continues into your golden years.

Newspapers in English

Newspapers from South Africa