Retire: Where to begin

Carina Jooste Latest, Retire

two baby chicks“Where do I begin with retirement planning?” is a question we often hear. And it’s a fair question, as the multitude of product options, service providers, and saving approaches are extremely difficult to navigate. So we’ve made a list of five considerations to get you going.

1. Educate yourself

What’s the difference between a retirement annuity, provident and pension fund? Can I have all of them? What even are GAs and LAs? What tax benefits do RAs and TFSAs bring to the party? How do ETFs and FSPs make it all happen? The industry is rife with products, acronyms, initialisms and jargon, but they’re not as scary once you know them. We’ve covered the above jumble of words in previous blog posts, and added the links to a handy reading list at the end of this post.

Speaking of the fundamentals, having a solid grasp of key financial concepts is key to helping you take control of your money – now, and in the future. We did a podcast on it 5 years ago, and it’s one we keep on returning to time and again. Take a listen (link below) and embark on your retirement planning journey with a solid first step.

Curated content to help you begin:

2. Understand your costs

Yes, we always bang the drum that the best time to start saving towards retirement is right away, but do take some time to understand where you’re at financially. How much does it cost to be you? Understanding your cost of living is the first step in understanding how much you would need to retire comfortably.

Curated content to help you begin: Know your number

3. And the costs of financial service providers

Before you sign on the dotted line, take some time to do a fee comparison. Over time, even the smallest percentages add up. Insurance-based products tend to be really expensive, with high fees and even higher penalties should you want to move to a different provider.

Curated content to help you begin: A glossary of fees

4. What’s your horizon?

Your investment time horizon is another variable that influences the approach you should take. The investment time horizon of someone who still has 40 years of employability left is a lot different from someone who is planning to retire in 10 or 15 years’ time.

5. Phone-a-Pro

How you save for retirement is the biggest financial decision you will make in your life (no pressure). So once you’ve armed yourself with basic knowledge of available products, their differences, the financial service providers (FSP) who offer these products, and the jargon said FSPs use to sell these products, consider roping in the services of a financial advisor to help you structure a plan that’s tailored to your unique financial and personal circumstances. And remember, you can negotiate the fee. But don’t disregard the first four steps listed here: Having a basic understanding of the associated concepts before going into a consultation is truly empowering.

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.