DURBAN – For many South Africans who were already finding it difficult to save for retirement, Covid-19 has created additional financial pressures which may take years to overcome.
The retirement outcomes for most South Africans were not looking good, even prior to Covid-19. The reasons for this include lower investment returns recently but is also directly related to elevated modern lifestyles, increasing longevity, low preservation of savings levels, and raising tax trends.
According to Gerard Visser, Certified Financial Planner at Alexander Forbes having a budget will aid you not only by freeing up extra funds to catch up your retirement contributions and it will also give you an opportunity to pay debts off faster or save some discretionary money.
“There are many reasons why it is important to follow a monthly budget. Besides reducing stress levels by keeping an eye on your spending habits, it also allows you to track your debts, finding opportunities to top up emergency funds or save extra towards your retirement. A budget goes hand-in-hand with setting and achieving financial goals,” he said.
The biggest two considerations that determine a successful retirement are the duration and level of financial dependency on your accumulated retirement funds. To fully retire at 60 or 65 is in steep contrast to new findings that suggest your most productive years could be after age 60.
“If you stopped contributions to your retirement annuity, or took a payment holiday on your pension or provident fund, you might be worried about the shortfall created, and how you’re going to catch up,”
“Stop worrying and take action to avoid retiring with insufficient funds. There are many ways to contribute to your retirement, from employer and employee contributions to pension or provident fund, monthly contributions to a Retirement Annuity or a tax-free savings account,” concludes Visser.
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