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Only six million people in South Africa belong to a retirement fund. (<a href=\http://www.shutterstock.com\>Shutterstock</a>)
RETIREMENT PLANNING for women needs to meet the very diverse needs of women today. Some of us are married, corporate working mothers, some of us are single, others are self-employed without children and some of us work on a commission-only basis or are freelancers.
The one thing we all have in common as women is that we tend to put our “ALL" into our work and into our families. Therefore one of the key challenges we face is making sure we take the time to put our finances in order, and more specifically, to sort out our retirement planning.
It is more critical than ever to ensure women take responsibility for their own financial future and take the appropriate steps to look properly into our finances and to plan accordingly.
A new study, which compared modern human life spans with those of hunter-gatherers shows that industrialisation and development are largely responsible for our species' dramatic gains in life expectancy. This is another major reason for us to require more money at retirement.
In addition, it is important to look forward to a good retirement. None of us wish to be dependent on our families or forced to be living under sub-par circumstances.
During retirement we will have much more time on our hands. A typical working day involves eight hours of work, eight hours of sleep and eight hours leisure. When we retire we will have 16 hours of leisure and it is during this time that we spend our money.
Good retirement planning will allow us to do the things we did not have time for before, be it travel, spending time with our friends, playing golf or bowls or going on adventures.
Imagine you are 60 years of age, have just retired and your alarm goes off at 7am. What are you going to do with your day, week, month, rest of your life?
That is a scary thought if you have not planned properly.
In order to avoid stress, worry or even a possible decline in health in our retirement years, the time to take things seriously is NOW. The challenges are many but I believe the four core challenges we face as women are:
* Lack of time
* Budget constraints
* Lack of knowledge
* Lack of discipline
Whilst some of us have no trouble realising what is required of us in order to find financial solutions, I am sensitive and aware of the fact that others may find this a momentous task, the following guidelines should help.
Find the time
Make the time and draw up a budget. I certainly live by this rule being from a Scottish background. Know what you are spending and take the time to tally up your expenses once a month. The easiest way is to draw up a simple spreadsheet and list your monthly expenses for food, electricity, rent, insurance etc. Keep all your cash receipts and then input the amounts into the spreadsheet including those direct debits and EFT’s from your bank statement.
This will help you to understand where your money is going. If you are overspending in an area then you can make the decision to be more sensible.
Budget constraints
This is a tough one especially for single working moms. I believe the budget spreadsheet will certainly help. If you are working for a corporate hopefully they will have a pension in place and as you receive bonuses, it is a good idea to carve off 30% to 50% of the bonus and put it towards your pension. The same with commission earners, when you receive your commission payments, the key is to have the discipline to save a portion each time.
Lack of knowledge
There is no harm in trying to improve your knowledge about good, sound investment and retirement planning. However since most of us simply do not have the time to plough our way through vast finance guides, I would recommend seeking the advice of a highly reputable financial advisor. Know the right questions to ask and if you are not sure then ask family or friends that are in the know on such matters.
It is also important that the financial advisor ask lots of questions and that you disclose your information accurately, in order that they understand your needs and situation completely.
For example, one of my dearest friends who works as a freelancer and therefore has an erratic income, was advised to lock up a large portion of her savings in a five year endowment policy, which is not the right advice for someone who does not have a steady stream of income.
When things got slow she was forced to cash in her policy and to pay a huge exit penalty, losing quite a bit of money. She is now working with a very good financial advisor who has put her on the right course and understands her unique situation.
Lack of discipline
Well… like anything in life, be it going to the gym to keep healthy, or trying to eat right, or spending quality time with one’s family, make the decision TODAY to start the process to get your finances in order.
Once you have made the decision and are on the right track, make certain you commit to ensuring the wheels turn forward.
Life moves very quickly and time waits for no woman. Start planning and making good decisions to ensure your finances and financial planning are in order. This will help you avoid a heap of stress later in life so that when it is time to down `tools’ you can simply ENJOY!
* This guest post is from Nicole Fannin, a wealth manager at the deVere Group, South Africa, who has over 17 years experience in the international financial services sector.
The one thing we all have in common as women is that we tend to put our “ALL" into our work and into our families. Therefore one of the key challenges we face is making sure we take the time to put our finances in order, and more specifically, to sort out our retirement planning.
It is more critical than ever to ensure women take responsibility for their own financial future and take the appropriate steps to look properly into our finances and to plan accordingly.
A new study, which compared modern human life spans with those of hunter-gatherers shows that industrialisation and development are largely responsible for our species' dramatic gains in life expectancy. This is another major reason for us to require more money at retirement.
In addition, it is important to look forward to a good retirement. None of us wish to be dependent on our families or forced to be living under sub-par circumstances.
During retirement we will have much more time on our hands. A typical working day involves eight hours of work, eight hours of sleep and eight hours leisure. When we retire we will have 16 hours of leisure and it is during this time that we spend our money.
Good retirement planning will allow us to do the things we did not have time for before, be it travel, spending time with our friends, playing golf or bowls or going on adventures.
Imagine you are 60 years of age, have just retired and your alarm goes off at 7am. What are you going to do with your day, week, month, rest of your life?
That is a scary thought if you have not planned properly.
In order to avoid stress, worry or even a possible decline in health in our retirement years, the time to take things seriously is NOW. The challenges are many but I believe the four core challenges we face as women are:
* Lack of time
* Budget constraints
* Lack of knowledge
* Lack of discipline
Whilst some of us have no trouble realising what is required of us in order to find financial solutions, I am sensitive and aware of the fact that others may find this a momentous task, the following guidelines should help.
Find the time
Make the time and draw up a budget. I certainly live by this rule being from a Scottish background. Know what you are spending and take the time to tally up your expenses once a month. The easiest way is to draw up a simple spreadsheet and list your monthly expenses for food, electricity, rent, insurance etc. Keep all your cash receipts and then input the amounts into the spreadsheet including those direct debits and EFT’s from your bank statement.
This will help you to understand where your money is going. If you are overspending in an area then you can make the decision to be more sensible.
Budget constraints
This is a tough one especially for single working moms. I believe the budget spreadsheet will certainly help. If you are working for a corporate hopefully they will have a pension in place and as you receive bonuses, it is a good idea to carve off 30% to 50% of the bonus and put it towards your pension. The same with commission earners, when you receive your commission payments, the key is to have the discipline to save a portion each time.
Lack of knowledge
There is no harm in trying to improve your knowledge about good, sound investment and retirement planning. However since most of us simply do not have the time to plough our way through vast finance guides, I would recommend seeking the advice of a highly reputable financial advisor. Know the right questions to ask and if you are not sure then ask family or friends that are in the know on such matters.
It is also important that the financial advisor ask lots of questions and that you disclose your information accurately, in order that they understand your needs and situation completely.
For example, one of my dearest friends who works as a freelancer and therefore has an erratic income, was advised to lock up a large portion of her savings in a five year endowment policy, which is not the right advice for someone who does not have a steady stream of income.
When things got slow she was forced to cash in her policy and to pay a huge exit penalty, losing quite a bit of money. She is now working with a very good financial advisor who has put her on the right course and understands her unique situation.
Lack of discipline
Well… like anything in life, be it going to the gym to keep healthy, or trying to eat right, or spending quality time with one’s family, make the decision TODAY to start the process to get your finances in order.
Once you have made the decision and are on the right track, make certain you commit to ensuring the wheels turn forward.
Life moves very quickly and time waits for no woman. Start planning and making good decisions to ensure your finances and financial planning are in order. This will help you avoid a heap of stress later in life so that when it is time to down `tools’ you can simply ENJOY!
* This guest post is from Nicole Fannin, a wealth manager at the deVere Group, South Africa, who has over 17 years experience in the international financial services sector.
