Whilst life can feel like a ball, full of fun and promise, the day of retirement is looming somewhere ahead. When that income or salary stops, make sure you will be able to carry on rocking instead of being left on the stairs, wondering what happened and what now?
The one mistake many of us make, is to rely on Prince Charming to take care of us in old age. We know that in a third of marriages, women end up single again, as divorce takes its toll. No matter how you were married (in community, accrual or with ante nuptial contract), divorce wreaks havoc on the assets, and in particular long term savings. Make sure you have your own retirement savings that will be safe from any costly division of assets or payment of legal fees.
But that is not the only risk one faces. Illness, disability or death of a spouse / partner can be financially devastating. Again, make sure you have considered these aspects and have sufficient protection in the form of policies, in place.
It is a sobering thought that in the US, the average age of widowhood is around 59! The bulk of women will be alone as they enter their 60’s, and today, 60 is the new 40, with advances in medical science.
So is retirement a problem? Yes it is with people living longer than previous generations. Women are expected to live till around 83, and men 78. That’s a fairly long time if you consider that you only have your working years to save enough money. Many of us are supporting our aging parents today, who simply did not save enough. They have outlived their money.
Apart from some women relying on Prince Charming, there are some other mistakes we make along the journey of life, when it comes to retirement planning:
- You have a pension fund or provident fund that you think will suffice. Think again! What happens if you are retrenched? You might be compelled to dip into these funds earlier than intended, leaving very little for old age. You also need to contribute to that fund for a very long time, to have enough money to sustain you till death. You will need to supplement your pension or provident fund benefits, without a doubt.
- You change jobs a few times during your career and cash in your pension / provident fund every time. Not clever, as you can never make up for lost time in saving. Preserve your benefits every time you change jobs. It’s not a windfall –it’s your future that you need to take care of.
- Starting too late – very few of us think about retirement when we are in our 20’s, but the truth is that the sooner you start, the less you have to save every month to reach your end goal. So if you haven’t started saving for retirement yet, start tomorrow, it’s better than next month or next year.
So how much money does one need to retire comfortably every month? How can you ensure that your lifestyle will continue (and maybe even improve!) in old age? What provision has your partner made for your retirement, and what will happen if you outlive your partner? How will your retirement income be affected by inflation? These are some of the important issues that you need to consider and need to discuss with a professional who can guide and advise you.
The Cinderella Syndrome went out of vogue years ago. Take control of your own retirement plan and take control of your future. Ensure that you carry on rocking for as long as your legs will carry you! Whether you are wearing glass slippers or not!
