Common Mistakes People Make with Retirement Annuities

According to the Association of Savings of South Africa (ASISA), they estimate that only 6% of South Africans are on their way to retire comfortable.

As Financial Advisors, our goal extends beyond merely managing retirement and other investment products. We strive to be your steadfast and reassuring voice amidst the deluge of information. Our guidance aims to protect family, friends, and neighbours from falling prey to Ponzi schemes with alluring promises of high returns or risky partnerships in ventures like shopping centres.

Some of the common mistakes made:

1. Plan your work and work your plan. Allowing a Financial Advisor to guide you in creating a Retirement Plan can reveal blind spots in your current financial strategy and help you overcome obstacles on your path to retirement. With their assistance, your retirement planning can be successful.

2. Being overly conservative in investing can be a double-edged sword. Time can serve as your greatest ally or adversary. In your younger years, it's advisable to invest more boldly in your portfolio, leveraging time to your advantage. As you approach retirement, your plan may recommend shifting some of your investments into more conservative funds.

3. Inflation is a crucial factor to consider in the retirement planning process. Neglecting its impact can have devastating effects on the final retirement values, as it diminishes the actual value and the purchasing power you possess.

4. Starting to save late or saving too little can be problematic. If you begin working at age 22 and retire at 65, you have an average of 43 years to save for retirement. With advancements in technology, people are increasingly living to 100 or beyond. In this case, the savings from 43 years would need to sustain you for 30 to 35 years. It's becoming impractical to start saving for retirement in your 30s or 40s.

5. Failing to preserve pension funds – Utilising your Pension/Provident funds or the new Savings pot will not benefit anyone. Preserving your pension or provident funds until retirement can significantly enhance your retirement savings, reducing the necessity for higher premiums as mentioned in point 4 above.

6. Budgeting – Wisely manage your finances and take command of your budget. Debt diverts funds from your savings.

7. Products – Ensure you are invested in the right product for your specific needs, considering factors such as your age, income, investment term, and purpose. We offer exceptional products that can complement your retirement plan effectively.

By considering the above and working on your plan, there is no way that we need to be stuck at a figure of only 6%. Contact our financial advisors today for expert help and guidance.