Are you saving money for your retirement? Here’s a guide to help you prepare

 (PHOTO: Getty Images/Gallo Images)
(PHOTO: Getty Images/Gallo Images)

Saving money for your retirement is just one of many things you will need to consider. Here’s a guide to help you prepare.

When you’re caught up in the daily grind of working and taking care of your children, retirement can feel like it’s a long way off and not something you have the time or energy to worry about. But life is so busy these days that before you know it that new chapter of your life will be looming.

Experts say thorough planning is key to a successful retirement, and while saving for this stage of your life is important, there are also plenty of other things you need to take into consideration. Retired American businessman and blogger Fritz Gilbert has compiled a handy checklist of everything you need to start thinking about in the last few years before retirement.

“You don’t have to have everything worked out to the finest detail five years before you retire,” he writes in his blog ( “But it’s important to have started to think about it by then so you can work out what kind of retirement you want. The lifestyle you choose will determine how much money you’ll need.”

We asked local experts to weigh in on Gilbert’s advice to provide you with a handy guide to all the steps you need to take before retirement.

5 years before retirement 

  • Confirm the age of retirement at your company, says Lore Winter, financial planner at Fiscal Private Client Services (Pty) Ltd.
  • Clarify what sources of income you’ll have after retirement. Are you a member of your employer’s retirement fund? If so, is it a pension or a provident fund? (see box on opposite page).
  • Find out if your retirement fund has a financial planner who can give you advice and an estimate of your pension amount at retirement, says Winter.
  • Compile a budget for your life during retirement.
  • Do you have children living with you? Would they have left home in five years’ time? This could reduce your costs and possibly allow you to move to a smaller house.
  • Find out if you qualify for a state old-age pension. This depends on your assets and level of income, she explains.
  • Sue McLennan, a financial planner at BDO financial services, says you should look at the options available to you if you know you’re not going to have enough money to live comfortably. Could your employer keep you on part-time or in another role? Should you perhaps consider a second career or start your own business?
  • Find out if there are courses available, either at your company or elsewhere, to improve your skills so you can keep working after retirement if you want or need to, says Winter.
  • Think of ways to cut back now so you can contribute more to your retirement savings.
  • Find out if your employer offers a medical aid subsidy after retirement.
  • If your employer provides life and disability cover, get advice about whether you’ll still need cover after retirement and if you’re able to continue any of the cover you have through your employer’s scheme in your personal capacity after retirement, Winter advises.
  • If you’re considering moving to a retirement home, start looking around so you know what your options are, McLennan says.
  • Talk to your partner about what you want your retirement to look like, says Kim Potgieter, a financial planner who focuses on holistic planning in retirement.

3 to four years before

  • Review your financial position and see how you’re progressing towards achieving your savings goals, says Lore Winter, financial planner at Fiscal Private Client Services (Pty) Ltd.
  • Assess your health and plan financially for any additional medical expenses if necessary.
  • If you have serious disease and disability insurance, review it and decide if you need to adjust it. If you can reduce your cover, you’ll be able to add more to your retirement savings.
  • Try to live on your retirement budget as an experiment, Winter suggests. Does the amount you had in mind tie up with your expectations?
  • Work out what major expenses you’ll have during retirement (apart from monthly expenses). You may want to buy a new car, for example, or contribute to a child’s wedding or a grandchild’s 21st birthday.
  • Decide which parts of your job you enjoyed and what you can replace it with during your retirement. If it provided you with social stimulation, consider joining a club of your choice now.
  • Think of things that will give you pleasure when retired, such as travelling. Make allowance for this in your budget.
  • If you’re considering taking up a second career or want to start a business, start refining your research now, says Lynda Smith, retirement life coach and founder of 50 Plus-Skills, an online skills community network for people over 50. Consider the experience you have, as well as your skills, financial position and health when looking at options.
  • Winter says it’s important to make sure your affairs are in order in the event of your death. Do the following if you haven’t already done so:
  • Write down all your important personal information, for example your assets, account numbers, the broker who sold your policies to you, passwords for accounts and investment platforms, and so forth. Store it in a safe place.
  • Keep a file that includes a copy of your will and all your most important documents on hand.

1 year before

  • Arrange to meet with your financial planner three to four times during the year to finalise your plans, says Sue McLennan, a financial planner at BDO financial services.
  • Get to know your company’s retirement process and obtain the necessary documents.
  • Your tax affairs must be in order before payments from your retirement fund can be made. You won’t necessarily immediately receive your pension when you stop working, so ensure you have funds set aside, Winter warns.
  • Consider your portfolio as a whole, for example your retirement fund and any other savings or investments you may have, and seek advice about which to use first when you stop working, Winter says.
  • If want to go the entrepreneurial route, now is the time to create all the necessary online platforms for it, Smith advises. Get advice about the legal structure of your business.
  • Make sure your medical aid cover continues after your retirement.
  • If your spouse is dependent on you, keep money aside in the event of your death. It could take a while before your partner will be able to start drawing from your pension fund.
  • Get an estate agent to do a valuation of your home so you can get an idea of its worth in case you’re thinking of downsizing as a smaller home will require less maintenance. Remember to take into account what the estate agent’s commission and capital gains tax will be.
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