Quote of the Week:

“True genius resides in the capacity for evaluation of uncertain, hazardous, and conflicting information.” Winston Churchill

The year really is winding up; and how fast this seems… A few weeks ago, we embarked on a mission to take stock of our financial goals and achievements. In the same regard, it is important to re-assess our retirement plans, so as to visualize where we are and what we need to do to move closer to getting to where we want to be in retirement. Undoubtedly, it is imperative to plan your finances properly before you retirement; this is the surest route to securing one’s financial future in retirement. In addition, retirement planning is not only about managing the financial aspect but also preparing the person psychologically too, especially to be able to manage their time, well-being and assets. However, as it is expected, everything else falls into place when your finances are in order.
Regardless of whether you have just started out with your retirement plans, or you have been at it for years with unshakable commitment, it is important to re-assess our retirement plans so as to confirm whether they are in line with the long-term goal of attaining financial security in old-age. The reasoning behind this is that a re-evaluation will help you see what kind of adjustments may be required to bring you closer to your ideal retirement. The key things to look out for are:

1. Am I saving enough?
This may appear to be a difficult question. How much is enough? Basically, in reference to a source of income in retirement, “enough” savings is that amount that can cater for a comfortable lifestyle, covering all necessities and a little luxury as well. Looking back, how were your saving habits during the year? Were they in line with your goals? Can you confidently rely on these savings to sufficiently cater for your life in retirement?
Due to inflation and a difficult economic environment, it is possible that your earlier estimates for the funds you would require when you retire are not entirely reflective of these conditions. To avoid such a scenario, a continuous reassessment is necessary. Performing an evaluation before the New Year begins places you in a position which will enable you to make the necessary adjustments to be adopted as soon as the New Year kicks off. What this does is that it gets rid of procrastination, thereby ensuring that no time is lost in running with your financial plans.

2. What do the statistics say about life expectancy?
There is a strong correlation between the size of your retirement savings and the average life expectancy. Life expectancy in essence is the average age most people are expected to live. The higher the age, the more you will need to save. Thanks to advances in medical science and a focus on health, many people are living well into their 80s. As a result of people living longer, longevity must be factored in when saving for retirement so that you don't run out of money in old age. Reassessing your retirement plans at this time of the year will enable you to factor in the life expectancy in your savings strategy, and hence ensure that your nest-egg will be sufficient for you once you attain retirement age.

3. How aggressive is your saving strategy?
You may have various plans, all geared towards securing your future in retirement. It could be saving in a personal pension plan, building or sustaining a business, or even investing in real estate. However you do it, you must assess your strategy, focusing on how aggressive it is. Risk should be higher for younger savers, while older savers must place safety as the most important element in their strategy. By merely re-evaluating your strategy, you give your retirement savings a rebalancing effect that incorporates the right amount of risk for your age and risk profile. In less than two weeks from now, we will all be making plans for our New Year resolutions. As we think about all other areas affecting our financial well-being, let us not forget to beef-up our retirement plans, bearing  in mind that to be truly generous with oneself, the first step is to give yourself the gift of financial well-being.

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