Most of us have an idea of what retirement will feel like - no work to go to, no worries over deadlines and office politics, and all the time in the world to enjoy life. However, many of us may not be able to enjoy our retirement as comfortably as we think, if the statistics are anything to go by.
According to the Global Retirement Index, South Africa is number 130 out of 150 countries when it comes to retirement security, with only 6% of South Africans able to maintain their standards of living when they retire. Why do we have such a low rating? Because we have high debt levels and we don’t plan for or prioritise our retirement needs.
With figures as alarming as these, is a prosperous retirement even possible for most of us? The answer, thankfully, is yes, no matter what your current financial status.
If you have a steady income
You more than likely already have a pension plan or retirement fund in place. If so, keep adding to it as often as possible, making sure to regularly review your plan and make sure it fulfils your needs when it comes to retirement. Remember to take inflation rates into account, as well as your desired standard of living, and make sure you meet with your financial adviser at least once or twice a year to confirm that your portfolio is in line with your expectations.
If you have a fluctuating income
As a self-employed person or entrepreneur, you may be wondering whether saving for retirement is even possible when you have no stable income to depend on. Fortunately, a flexible investment option, such as a retirement annuity, can give you the security you need.
A retirement annuity is a private pension plan made up of a range of investment strategies. This kind of investment gives you the flexibility of either making ad hoc payments when possible, or a fixed contribution on a monthly or quarterly basis. Contributions to retirement annuities are tax deductible up to certain limits, and the investment is free from capital gains tax and safe from creditors if you ever become insolvent.
If you have no retirement savings
Perhaps you've been meaning to start saving for retirement; perhaps you chose to cash out your policy when you left your last employer. Either way, you have little to no funds to put away towards your retirement. While this may seem scary, sound financial advice and aggressive saving can help put you back on track.
Consult a financial adviser to work out how much you need to save every month to ensure a comfortable retirement. Even if you're unable to start saving the full amount right away, every little bit will count towards a more secure financial future.
If you're looking for something more
Pension plans, provident funds and retirement annuities are all well and good, but are there any other ways to make sure you are financially comfortable later in life? At Discovery, you'll find a range of options designed to do just that. You can boost your earnings with Discovery Invest by qualifying for up to 15% more value with a Discovery Invest Retirement or Preserver Plan. You can also boost your retirement savings and even convert your unused life cover into additional retirement savings with Discovery Life’s Retirement Optimiser, or even build your retirement savings offshore with the Dollar Discovery Retirement Optimiser. If you add a Buy-Up Cash Conversion Benefit to your Discovery Life Plan, you could qualify for up to 200% of your cover- or Financial Integrator Funds to be paid back to you from age 65, in four equal payments every four years thereafter.
As you can see, when it comes to saving for your retirement there are more than enough options available to you, no matter what your current financial status is. All it takes is a little planning and some dedication, and the comfortable retirement you've been looking forward to could soon be a relaxing, rewarding reality!
For more information on the range of Discovery Life and Discovery Invest retirement solutions, visit our website or speak to your financial adviser today.
The Dollar Life Plan and Dollar Discovery Retirement Optimiser are issued by Discovery Life International, the Guernsey branch of Discovery Life Limited (South Africa), licensed by the Guernsey Financial Services Commission, under the Insurance Business (Bailiwick of Guernsey) Law 2002 to carry on long-term insurance business. The Dollar Life Plan and the Dollar Discovery Retirement Optimiser are also subject to the South African Long-term Insurance Act of 1998. Discovery Life is an authorised financial services provider. Registration number 1966/003901/06. The Dollar Discovery Retirement Optimiser is administered by Discovery Life Investment Services (Pty) Limited trading as Discovery Invest, a subsidiary of Discovery Limited. The trustee appointed by the Branch must hold the licensed insurer’s assets representing at least 90% of policyholder liabilities in trust as imposed by a standard condition on the licence of the Insurer under section 12 of the Insurance Business (Bailiwick of Guernsey) Law, 2002 (as amended). The information given in this document is based on Discovery’s understanding of current law and practice in South Africa and Guernsey. No liability will be accepted for the effect of any future legislative or regulatory changes.