Your Career Journey: Planning for Retirement – Part 1


In the next two blog posts, Clarette Lombard (Sanlam Financial Adviser) will explain the ins and outs of planning for retirement. She will share:

  • what retirement is
  • how to plan for it
  • who to partner with
  • when to start
planning for your retirement with UPvisor

Retirement is the withdrawal from one’s position or occupation or from one’s active working life. A person may also semi-retire by reducing work hours.

Find the right financial planner for you

Obtaining quality professional financial advice is a crucial part of achieving your financial and life goals. Big decisions, such as where to invest, and which products are right for your needs need to be made. Therefore, it is vital to have a professional on call that you can trust to give you top quality advice.

Choosing a financial planner means “shopping around”. In other words, find one who can offer you:

  • a personal, holistic overview of
  • where you are and
  • where you need to be to achieve your wealth creation goals.

The right partner with the right plan can set you on the road to financial freedom

Find the right retirement product or combination thereof for you

There are different ways to save towards your Retirement. Be prepared by diligently investing specifically for your Retirement from your first payslip. When you are part of a company with a pension or provident fund, you can contribute to those as well as a Retirement Annuity (RA).

These combined contributions count towards your tax benefit, which reduce your taxable income.

Consider contributing the largest amount that can be deducted for income tax purposes. I.e. 27.5% of your salary, with a maximum of R350 000 across all retirement savings platforms you may be using. And, if you have the means to contribute more than this, put additional savings in a tax-free savings account (TFSA).

Life happens – that’s why choosing the right RA is critical. When it comes to retirement planning, it’s all about enjoying the benefit of investing for the long run and the power of compound interest. However, sometimes life happens and impacts your ability to continue your RA payments.

When it does, you want to have the peace of mind that you won’t be penalised in a way that will unduly impact your retirement dreams.

A decision to stop contributing to your RA should never be taken lightly. It also shouldn’t be taken without the necessary advice from an accredited financial adviser or broker. But, we cannot predict the future or deny the reality of people’s lives. Therefore, the very decision about which RA product to choose, is so crucial.

Always preserve your pension savings when changing jobs

Don’t underestimate the impact of taking even a small amount of your retirement savings when moving from one employer to the next. It will affect your income as well as your tax at Retirement. Contact an accredited financial adviser or broker to discuss your available pension/provident preservation options. Unfortunately, the impact of your financial decisions are sometimes only seen when you are already retired. Make wise financial decisions now.

Retirement success

You won’t stop growing as an individual in retirement, so your money needs to continue growing as well. Retirement today means living your best life. In-depth interviews with 82 retired South Africans in their 60s, 70s and 80s have borne this out. They paint an upbeat picture of retirees who surf, travel, do charity work, study and teach during the proverbial golden years.

Glacier by Sanlam commissioned the ‘Through the Years’ report. It focused on understanding what makes a healthy and fulfilling retirement. The chosen sample of respondents had retired with a relatively comfortable monthly income. It showcases how saving can contribute to a full and healthy life after retiring. It also looks at how financial planning had contributed to this outcome.

Planning is key

Successful planning for a happy retirement has essential components of which Financial security plays a big role. Money is just one part of a happy retirement, but it’s important. 82% of the participants who felt reasonably comfortable that they had enough retirement savings, had consulted a financial planner.

Conversely, 75% of those who said they were unsure their retirement savings would be sufficient, had not consulted with a financial planner.

To be continued

Check out part 2 of this blog post where Clarette will share about when to start saving as well as ways to make saving fun. Stay tuned to learn about planning for your retirement!

Lastly, this information has been largely drawn from Sanlam’s resources. Be sure to visit Sanlam’s website for more information.