There are various statistics and opinions about retirement and how to put away a nest egg to ensure a comfortable retirement. The one thing that all these figures and opinions have in common is that the vast majority (about 95%) of South Africans cannot retire independently and that very few of us save enough (and long enough) for retirement. In other words, just 5% of the population will not have to stand in long queues for a state pension, will not have to ask friends or family members for money, will not have to sell their assets for money and will not struggle to make ends meet after retirement – a very small section of the population indeed.
The financial environment relating to retirement is very complex. There are various ways in which to save up for retirement, as well as various tax implications regarding your contributions and withdrawals and various companies with products that seem complicated. At retirement there are also several options available and the implications of each one must be carefully considered. After retirement, income sustainability and growth and inflationary risks are all factors that play a role and have to be taken into account. To complicate matters further, changes in the regulatory environment and even in the Acts (Pension Funds Act, Income Tax Act) have to be factored in.
Clearly, decisions that could make the difference between a comfortable retirement and a bleak retirement have to be made before, during and after retirement. Regardless of what stage of life you are currently in, it is crucial to find out from experts how you are faring with respect to making provision for retirement. It is also important that the experts you consult explain your current situation by means of illustrations.
Don’t be afraid to ask questions about your retirement and, in particular, don’t be afraid of the answers you may get. Find out as soon as possible whether or not you are still on the right track and what the possible implications are of the decisions you have to make. Speak with a reliable financial advisor, or contact Solidarity Financial Services to get more information on how to make provision for retirement.