A famous philosopher once offered the thought that if we were to live our lives backwards, that is, to start old and get progressively younger, would we not be so much happier, with so much more to look forward to?
Like all things it’s a matter of perspective. Our retirement should never be understood as a downgrading of our lives, when we are supposedly meant to step back from everything we have built up, and just slow down a bit.
Would it not be better if we were to understand retirement as the beginning of a new adventure in our lives, a time when we should be aspiring to do the things we never could during our busy professional and family lives?
“Retirement should be thought of as a new beginning. You have the time — and hopefully the money — to do whatever you like, whether it’s starting a new passion project, a new business venture or serving your community. The possibilities are endless,” says Nosipho Nhleko, Investment Product Specialist at Liberty.
Here are her five tips on how you can invest in the future you:
- Pay your future self
Every month, we see our salaries diminish as we pay off our various debit orders, fund our necessities and sometimes even pass it on to our friends and families in need. But most importantly, the first person you should be allocating money towards, is you.
“When people put money into a retirement annuity or savings account, they sometimes feel like that money is just going to make money for the financial institution, but you’re actually paying your future self and letting that money expand,” says Nhleko.
“This lets you, once you get to retirement age, not have to be dependent on your children, and this also means that they’ll have better opportunities to grow their own finances,” she says.
- Retire the highlife now, so you can live your best life later
There are always expectations about how we live our lives and spend our money, whether they come from friends or relatives. If your neighbours are living the highlife, there should be no added pressure on you to live extravagantly and go into debt. Living within your means, reducing unnecessary expenses and using those savings to build your long-term goals is tough, but it’ll be worth it.
“It’s important to set realistic finance goals, but they can always be upgraded when life is going well. You can experience your own wealth, but you need to have a positive, realistic relationship with your money that isn’t influenced by other people,” says Nhleko.
- Check your investment statements
Your investment statement helps you understand where the money you are saving goes, and if you are on track with your goals – like your desired income during retirement. Making sure you know where your money is invested is key, and to manage your expectations of how that capital is growing and what those assets can do for you.
You can ask your Financial Adviser (FA) for projections which can give you the idea of where your portfolio could be in the next five years. “Of course, these projections are sometimes seen as a guarantee, but they are not, as there are always a lot of factors at play in developing your investment. Growth rates vary, so it’s important to make sure you’re always aware of your risk,” says Nhleko. For example, higher risk investments are probably more appropriate for younger investors, as there is more time to recover in the event of a loss.
- Advice can get you to where you want to be
If understanding stocks, bonds and your tolerance for risk feels overwhelming — that’s totally fine, because you don’t have to be alone. A Financial Adviser (FA) is trained to help you understand the best ways to invest, and to give you the tools you need in your unique situation. If you don’t have all the details on the best ways to grow your wealth — such as tax-free savings accounts, retirement annuities and living annuities — it’s important to consult and find out what’s best for you.
“Your FA is there to help you manage expectations and invest in ways that respond to your life situation, and even worldwide economic events. An entrepreneur shouldn’t necessarily have the same investment portfolio as someone who earns a more regular salary. Everyone is unique,” says Nhleko.
- Protect and grow your retirement income with Liberty’s Retirement Range
Careers change. Markets can be shaken. Accidents happen. Because of this, nothing is more important than protecting your investments, especially the money that’s going towards your retirement.
Liberty’s Retirement Range covers an array of post-employment needs. When you invest in the Liberty Retirement Annuity you have the option to contribute to the Exact Income Fund which guarantees a level of your retirement income, so you know exactly how much income you’ll have at retirement. You could also choose to use the High-Water Mark Guarantee to secure 80% of your highest quarterly returns, giving you the freedom to invest in higher-growth assets. Providing you with the security to reach your financial goals is part of the new philosophy which underpins retirement products developed by Liberty.
Taking care of your health is equally as important as having the right retirement solutions.
“Of course, you ideally don’t want to stop putting money towards your retirement when life gets hard,” says Nhleko. There are other ways to ensure that your monthly earnings aren’t affected in cases of emergency such as Critical Illness Cover, Income Protection and Disability Cover. They’re all available to make sure that you can support yourself and your family in the worst-case scenario,” she says.
For more information on Liberty’s Retirement Range visit:
This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purposes only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services.
Liberty Group Limited is a licenced insurer and an Authorised Financial Services Provider (no 2409).
For more details about benefits, definitions, guarantees, fees, tax, limitations, charges, premiums/contributions or other conditions and associated risks, please speak to a Financial Adviser.