The last decade before retirement can be stressful. You might not be sure if you’ve saved enough, or you may know that you need to save more and worry that time is running out. Unfortunately, this is the reality for many of us. However, there are several actions you can take to boost your retirement income – even in the last decade of your working life.
Action step 1
Delay your retirement (if possible). This pulls two levers that can both positively impact the amount you’ll have in retirement: You’ll have more time to invest and more time for your invested money to grow, and you’ll need less money in retirement as you’ll be retired for a shorter period. These two levers could potentially double your monthly retirement income if you’re able to delay retirement for a decade.
Data from NMG Benefits shows that delaying retirement by four years can add 10% to your retirement pot but delaying retirement by a decade? That can double your retirement pot.
Action step 2
Start spending less and invest the money saved. This adds to your retirement investment pot and lowers your monthly expenses which, if you can maintain this behaviour, means that you’ll also spend less when you’re retired. If you’re a two car family it’s worth considering the true cost of car ownership.
Action step 3
Check your fees. Even a saving of 1% a year in fees will improve your retirement situation. And beware of hidden fees when you do retire. See our post on moving your retirement fund.
Action step 4
Acquire new skills that can provide additional income. This can benefit you during your working years (extra Rands to invest), and provide extra income when you’re retired. Consider a new skill in your area of expertise, consulting within your industry post-retirement or try your hand at something completely new. Kristia dedicated an episode of the Fat Wallet Show to this subject: Passive Income.
However, not all these action steps are always viable. For example, many companies have a mandatory retirement age, preventing a delayed retirement. But a combination of these strategies could put your retirement savings into a much healthier state.
Retire blog
Saving for retirement is the biggest investment most of us will ever make. Sadly, it can also be very complicated. In this monthly blog, Carina Jooste responds to common retirement questions, ranging from which products are best suited to different circumstances to efficient tax treatments.