If you are retiring at the end of 2023 and you should start the planning process for what the rest of your life will be right now. Too often people who are retiring leave too little time for planning and it then becomes exceedingly difficult to obtain the retirement outcomes they want to achieve. Following the four steps below will greatly enhance your retirement experience:
Determine your retirement destiny.
Only you can decide what your life will be like the day after your contract of employment ends. Do you intend to keep on working? Do you want to turn your hobby into a business? Do you want to travel? Do you want to spend time with family and friends? You therefore must take a lifestyle decision on what you want your life to look like after retirement before you can take a financial decision that will support your intended lifestyle.
Clean house
Get rid of all debt and reduce non-essential expenses where possible. Remember, soon you might not have the same income to cover these expenses in future. Secondly, draft a post-retirement budget of the essential expenses you will have, the “nice to haves” and the luxury items you want in retirement. Also look at the other income streams, for example, rental properties, that you might have after retirement to plan the amount of income you will have after retirement to cover your living expenses.
Educate yourself.
You should know and understand the financial options you have at retirement. You should gain information on the options you have in terms of the rules of your retirement fund and how those options will affect your lifestyle choices. Understand the investment options you will have after retirement and which ones are most suitable for your lifestyle decisions.
Structure your retirement plan.
After educating yourself, you will in all probability still need the aid of experts. Help is available, but you must ask for it. A lot of people want to save money by avoiding paying for the services of a good financial advisor and tax advisor without taking the cost of not having a well-researched retirement plan in place into account. You will have better retirement outcomes with R950 000 and a retirement plan based on expert advice than having R1 000 000 without any retirement plan. The money spent on expert advice will be insignificant compared to the irreparable future harm of inadequate financial planning at retirement.
If you plan right and take appropriate action in regard to your retirement now, it will relieve stress and reduce uncertainty you approach your retirement date.