Getting Ready to Retire

• Plan Your Retirement: How old are you now and when do you want to retire from paid employment? How do you want to live when you retire and how do you want to sustain yourself financially? Beyond income, what do youplan to do with your time when you retire? What’s going to keep you getting out of bed every day? Make a list of your retirement goals and try to narrow it down to five main goals you can track your progress on.

• Take Stock of your company Retirement Plan: You should have an idea of what income will be available to you when you retire. The first place to start is your Retirement Savings plan. Ask your pension fund provider how much you will have in your account by retirement age based on your company’s current contributions. If the numbers don’t look too exciting, you should consider topping up your company’s monthly contributions with a private retirement plan.

• Target your Savings: Calculate how much you want to live on once your salary stops. How much do you need to have in your savings account to keep you in the lifestyle you want? Work backwards from this and start putting aside the amount you need to make this up on a monthly basis.

• Review your Asset Base: Look at other assets you have and put a value to them – dividends, rental income, market value of landed property. How much do these all come to and how well do they help you reach your retirement goals?

• Where Will You Live?: Ideally you should no longer be paying rent in your retirement years, but for that to happen you must either be living in your own property now or making plans to buy/build. If your company offers you a mortgage plan you should explore taking advantage of it, otherwise talk to a Mortgage company – typically these loans run from 15-20 years depending on how close to retirement age you are. So the sooner you start, the better.

• Diversify your Income and Invest for Growth: In the previous post, we talked about getting a side hustle to fund your retirement. In an ideal world, your side hustle willbecome your main business by retirement and your primarysource of monthly income. Returns from investments, etc should just add to the pool of funds you generate from this business.

• Get Long-term Medical Insurance: You need to think of your health as well. As we age, our bodies are more prone to breaking down and recovery time is longer than when we were younger. Don’t skimp on health insurance, make sure you have a decent plan that ideally covers you and your dependents so you’re not having to break into your savings to take care of medical bills.

• Avoid Unnecessary Debt: The things that seem important now may not matter so much during the retirement years, so be careful what you get into debt for while working. Make sure the loans you have are short term and can be fully paid off while still in paid employment without damaging your long term financial health.

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