The future you: what financial future are you building for yourself?


Grey hair and plaid blazers may have seemed a long way off when you were 25, but do you notice they are in fashion right now? It's a clue that life is changing, rapidly. People are living longer, better, healthier lives thanks to technology and medical advancements. It means the goalposts have changed.

Discovery's data suggests that the average Vitality member will live to around 80 years old. Gold and Diamond Vitality members are expected to live to almost 90. That's today, but life expectancies are continuing to increase. The reality is that one day life expectancies may rise above 100 as medical technology advances. It's a great way to #LoveYourFutureSelf!

But what does that mean for you? With longer lifespans ahead of us, how are you preparing for those sunset years, when you will reap the rewards for your many years of work?

It's closer than you think, and costs less than you think

"Whatever your dream lifestyle looks like, we know that to get it, you have to start saving from as early as possible. It costs far less to start saving when you have your first job, than when you are, say, 40. The closer you are to retirement, the more expensive it gets to fund your retirement," says Lungile Mashigo, Senior Marketing Manager at Discovery Invest.

"Conventional estimates say that if you start saving at 25, you should be saving 15% of your salary every month to retire comfortably. But if you only start saving at 40, the amount you need to save jumps up to around 35% of your salary each month. I think we can all agree that's not really possible!"

"Your retirement savings rely on the power of compound growth to meet your goal. With people living longer, it's more important than ever before to start saving for retirement as early as possible," Mashigo says.

It is about quality of life, in the greatest quantity

"Apart from saving, our research shows how living healthier can help you in retirement. You have a better quality of life later if you exercise, eat well and screen for illness now. What is the point of living longer, in poor health?" says Mashigo.

Discovery research, and the latest scientific data shows that the healthier you are now, the better chance you have to retire in good health later.

"Health, we know, is most often within our locus of control. Even if you want to work for a few more years post the typical retirement age, you must be able to summon the energy to work, and that comes from taking care of your health. If you can retire in good health, you are fit enough to travel, spend time with children or loved ones. So the quality of those years is also important," she adds.

So what should you be doing?

"If you haven't yet, it's best to come up with a retirement savings plan as soon as possible and commit to it. A good financial adviser can be invaluable in this regard. By saving as soon, and as much, as possible, you have the best chance of reaching your retirement goal," says Mashigo.

Being able to track your progress regularly means you can also catch any issue quickly, says Ingram. "It's difficult to make a year's worth of saving up in month 11, if you only notice it then."

"Managing your health is vitally important. Not only is it the best way to maximise your chances of living your sunset years in good health, but it also maximises your chances of being able to push out your retirement age and continue working well into your 60s, if you wish to," she adds.

"Truthfully, we should all be considering retiring later. As life expectancy increases, the reality for most South Africans is that there are now too many years left at the end of our money when we retire."

"Worldwide, developed countries are contemplating pushing the standard retirement age out to 70. So we should all start mentally preparing to retire later, and physically preparing by staying active, eating well and knowing our health today. These are all ways to #LoveYourFutureSelf, and in doing so, lower your financial risk as you age."

This document is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services Pty (Ltd): Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06, a licensed life Insurer,an authorised financial service provider and registered credit provider, NCR Reg No. NCRCP3555. All boosts are offered through the insurer, Discovery Life Limited. The insurer reserves the right to review and change the qualifying requirements for boosts at any time. Product Rules, Terms and Conditions Apply

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