| RETIREMENT PLANNING: KEEPING THE PACE |
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Quote of the Week: “To accomplish great things, we must not only act but also dream; not only plan but also believe.” Anatole France-Writer and literature Nobel prize holder.
In a survey conducted on behalf of the Retirement Benefits Authority (RBA) recently, the most common reasons that people gave for not saving for retirement included fear of not reaching the age to enjoy retirement savings, uncertainty on how much one’s retirement savings will be considering the erosive effects of inflation, unwillingness to start early and preferring instead to enjoy the rewards of a new job, and overall safety of funds invested. In a nut-shell, many individuals don’t see the sense in delaying gratification today so as to be able to live in comfort tomorrow. Apart from finding it hard to save for a future time that seems so far away, there are cases where fear is the main hindrance in sticking to a disciplined retirement saving strategy. All too often people allow fear to stop them from saving money; Fear of not having money to pay bills, fear of not keeping up with peers, fear of being called cheap, and fear of not getting the chance to use up the money that has been saved, among others. Even though it may make little sense now, developing a retirement plan will help you discover the actions you need to take to prepare for a financially secure future. The sooner you begin this planning process, the better. Waiting until you are only a few years away from retirement may not give you the time necessary to accumulate the funds you will need for your retirement years. Obviously, deciding how much money you need for retirement is a highly personal calculation, which depends on any number of factors, from your current lifestyle to your general state of health to whether you plan to retire early. Figuring out the ‘how-much’ part of one’s retirement plans would make it easier to draw up a plan towards saving for retirement. To make it a habit that is easy to keep, one must devise and stick to a plan that is ‘derailment-proof’. Here are a few ways to do this: Create a tangible benefit. It seems harder to stick to a retirement savings plan when one thinks of it in monetary terms. Instead, think of the lifestyle that you are saving up for. Translate the savings goal into what you will actually do once you retire. These goals should be your motivation to save. No one wants to save money just to reach a certain number, but everybody will work hard to get to live the kind of life they dream of. Make it automatic. One of the best ways of saving in a retirement plan is by automating the process, e.g. via standing orders, or check-off systems. The theory behind this is that when money does not enter your pocket, you will not feel the hesitation to take it out and put it away for your future in retirement. Create a plan and execute it successfully. Having a plan and watching your savings grow can give you an incredible sense of achievement and satisfaction. Once you create a solid retirement plan and begin hitting your savings goals every month, it becomes a powerful motivator to save even more. The bottom line is, even though the benefits of saving for retirement may not seem as important as meeting our current daily demands; when that time comes, and one can no longer be in active employment to seek a means of living, it is only the money kept aside for retirement that will enable one to sustain a comfortable standard of living. Please talk to us on how to get started on your retirement plans, if you haven’t already. You can send your comments or questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or visit our offices at Ecobank towers, 7th floor, Muindi Mbingu street. You can also follow us on our facebook page- Zimele Asset Management ( Kenya) View Older Weekly Updates
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