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Be prepared for life's curve balls

An unexpected pregnancy can wreak havoc with your long-term financial plans. (Shutterstock)
An unexpected pregnancy can wreak havoc with your long-term financial plans. (Shutterstock)
Cape Town - South African women are following the global trend of deferring motherhood, says Kirsty Buchanan, a financial planning coach at Acsis.

For many women contemplating entering the baby stakes, 40 seems to be the new 20, says Buchanan. She points to Oscar-winning actress Halle Berry, who has fallen pregnant at the age of 46 and is expecting the birth of her baby boy any day now, after having her firstborn at 41.

This highlights the need for consumers, both women and men, to evaluate and adjust their financial planning if they want to place a secure retirement within reach.

“Compared to a few years ago, women are now increasingly having children at a later stage in life which can impact on their retirement savings in that they may still have to support their children as they approach their golden years," says Buchanan.

“These sort of life stage changes therefore need to be factored into a financial plan so that consumers  not only ensure they have enough capital to retire with, but that they also continue to grow their investment during their retired years.”

It's a fact that many consumers don't even think of reviewing - or even drafting - a financial plan until something changes in their life, such as having a 'laatlammetjie' or suddenly losing a job.

This is bad news for many people's retirement capital, and the consequences are only too visible in research which shows that only six out of a hundred South Africans can look forward to a financially secure retirement.

Retirement could be a considerable chunk of your lifetime, so a financial plan definitely deserves careful consideration.

“Typically, someone who started work at 25, retired at 65 and survived until 100, which is not out of the ordinary any more, will spend about 25% of their life being supported by their parents, 40% supporting themselves by working and 35% supporting themselves during retirement.

In other words, you have 40 years to save enough to support your lifestyle for 35 years once you leave the job market. Although the retirement portion of your life only makes up 35% of the number of years they spend on earth, it is actually the most expensive part of their entire lifetime due to inflation.

Buchanan points out that the income you earn during your working years has to support you not only during that time, but also throughout your retirement.

She suggests a relatively quick, once-a-year revision of your finances to identify pitfalls or potential issues that may have gone unnoticed.

"This check not only provides peace of mind, but also the opportunity to make any changes that could avoid unforeseen costs.

“It is not easy to plan ahead and forgo spending today when the future seems like a long way away, but it is essential for successfully preparing for retirement as life can sometimes throw us a curve ball."









 
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