Five steps to se­cu­rity in re­tire­ment

Weekend Witness - - Scene Around -

THE start of a new year is a good time to start proper plan­ning for a fi­nan­cially se­cure re­tire­ment. Ac­cord­ing to na­tional Trea­sury, only six per­cent of the pop­u­la­tion will have enough money to re­tire com­fort­ably.

Sta­tis­tics show that peo­ple are liv­ing longer, which adds to the chal­lenge of pro­vid­ing enough for re­tire­ment. Steven Nathan, chief ex­ec­u­tive of­fi­cer of 10X In­vest­ments, has five res­o­lu­tions for re­tire­ment in­vest­ing to help en­sure a com­fort­able re­tire­ment. 1. SET A RE­TIRE­MENT GOAL Quan­tify your goal. You need to cal­cu­late how much money you need to en­sure a com­fort­able re­tire­ment.

A good place to start is a min­i­mum re­place­ment of 60% of your fi­nal salary, or about 10 times your cur­rent an­nual salary. 2. THE LOWER THE FEES, THE GREATER THE RE­TIRE­MENT POT Watch out for high fees. You should pay no more than 1,5%, and prefer­ably be­low one per­cent.

If you can save one per­cent in fees, your fi­nal pen­sion amount could in­crease by about 30%. A re­cent Trea­sury study showed that if con­sumers re­duce their fees from 2,5% to 0,5%, they could dou­ble their fi­nal pen­sion. 3. HIGH EQ­UITY STRAT­EGY You should have an age­ap­pro­pri­ate in­vest­ment strat­egy. Nathan ad­vises hav­ing 75% in­vested in growth as­sets, such as listed shares and prop­erty, to reach your goal and gen­er­ate a re­turn of be­tween five per­cent and six per­cent per year above in­fla­tion. You can switch to a more con­ser­va­tive port­fo­lio five years be­fore re­tire­ment. 4. STRICT SAV­INGS REGIME You should save at least 15% of your monthly salary for 40 years to build a suf­fi­cient re­tire­ment pot. Save as much as you can for as long as you can. 5. COM­POUND IN­TER­EST Ig­nore short­term stock­mar­ket vo­latil­ity and the dis­trac­tion of mar­ket com­men­ta­tors who of­ten en­cour­age in­vestors to switch funds. Your goal is to max­imise the size of your in­vest­ment at re­tire­ment and not worry about the short term. — Busi­ness



Steven Nathan is chief ex­ec­u­tive of­fi­cer of 10X In­vest­ments.

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