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Johannesburg - The reality of retirement is vastly different in today’s world than the vision of a period to put your feet up, tend to the garden and travel extensively, according to John Kennedy, advisory partner at Citadel Wealth Management.
He looks at important considerations to take into account before retiring at the traditional age of 60 to 65.
You could live to be 100
Today it is highly possible that the average person could reach the age of 100 - yet people often stop working somewhere between 60 and 65.
This predicament has far-reaching financial consequences on retirement, as the same amount of time could be spent on the retirement phase of your life as on your working years.
Saving for retirement is also compounded by the possibility that during your working life, you are paying for expenses on top of saving for retirement.
Given this, consider the notion to extend your working years and prolong the age of retirement.
Financial independence is critical
Many people can't afford to retire early, especially if they want to preserve the type of lifestyle they have been leading.
So, many pre-retirees need to work for a longer period to save for this stage of their lives.
While wealthy individuals may be able to do less at an early age, the key is to rather establish when you are able to become financially independent; this will give you the choice to work less, or not at all.
Financial independence means having sufficient capital, managed properly using the principles of wealth preservation.
This will allow for an adequate income to manage your desired lifestyle for the rest of your life.
More people would be financially independent and able to deal with the challenge of forced retirement at 65 if this principle was understood, and planned for, earlier on in life.
The honeymoon can end
Moodiness, lethargy and even full-blown depression and illness can become real issues for individuals who were active during their working years.
Of course this is not true in all cases, as many thoroughly enjoy the freedom and relaxation that retirement can bring and are able to enjoy the extra time they now have to for other pursuits.
Find meaning by using expertise during retirement
Many people get a sense of purpose through work and need to keep growing, have goals and challenge themselves during retirement.
When retiring, consider using the knowledge, skills and experience you have gained throughout your working years in some other way, regardless of any physical or financial limitations you may be faced with.
You may wish to stay involved in a business but perhaps work fewer hours, mentor younger people, become a teacher, get stuck into philanthropic activities or develop that lifelong skill you never had the time for.
He looks at important considerations to take into account before retiring at the traditional age of 60 to 65.
You could live to be 100
Today it is highly possible that the average person could reach the age of 100 - yet people often stop working somewhere between 60 and 65.
This predicament has far-reaching financial consequences on retirement, as the same amount of time could be spent on the retirement phase of your life as on your working years.
Saving for retirement is also compounded by the possibility that during your working life, you are paying for expenses on top of saving for retirement.
Given this, consider the notion to extend your working years and prolong the age of retirement.
Financial independence is critical
Many people can't afford to retire early, especially if they want to preserve the type of lifestyle they have been leading.
So, many pre-retirees need to work for a longer period to save for this stage of their lives.
While wealthy individuals may be able to do less at an early age, the key is to rather establish when you are able to become financially independent; this will give you the choice to work less, or not at all.
Financial independence means having sufficient capital, managed properly using the principles of wealth preservation.
This will allow for an adequate income to manage your desired lifestyle for the rest of your life.
More people would be financially independent and able to deal with the challenge of forced retirement at 65 if this principle was understood, and planned for, earlier on in life.
The honeymoon can end
Moodiness, lethargy and even full-blown depression and illness can become real issues for individuals who were active during their working years.
Of course this is not true in all cases, as many thoroughly enjoy the freedom and relaxation that retirement can bring and are able to enjoy the extra time they now have to for other pursuits.
Find meaning by using expertise during retirement
Many people get a sense of purpose through work and need to keep growing, have goals and challenge themselves during retirement.
When retiring, consider using the knowledge, skills and experience you have gained throughout your working years in some other way, regardless of any physical or financial limitations you may be faced with.
You may wish to stay involved in a business but perhaps work fewer hours, mentor younger people, become a teacher, get stuck into philanthropic activities or develop that lifelong skill you never had the time for.
