Retirement planning is crucial at every stage of life, but the focus will shift as circumstances change, according to Robyn Laubscher, advice and product specialist at PSG Wealth.
As your life changes, your retirement planning will also need to change.
Laubscher said: "Also, bear in mind that several factors have positively impacted human longevity over time, which has contributed to the increase in average life expectancy worldwide.
"Increased longevity requires a thoughtful, flexible retirement plan that anticipates not only a longer life but also the changing needs and challenges that come with it."
Here's what you need to consider at different stages of your lifetime.
Beginning of your career
- Start saving early. Compound interest can benefit those who start saving sooner while small, consistent contributions can experience significant growth over time.
- Employer contributions: Take full advantage of employer retirement plans.
- Develop budgeting habits: Having this skill set will allow you to save more and achieve your financial goals.
- Invest in growth assets: With many years until retirement, you should focus on growth-orientated investments that can offer you higher potential returns.
- Use the most appropriate products: While there are many product options available to investors, you need to make sure that you get financial advice to help you make the right decisions.
Marriage and children
- Reassess your investments: With new family commitments which could also include owning a home, you should consider a diversified portfolio that balances growth and stability.
- Plan for education costs: Ensure that you balance your retirement savings with other financial responsibilities like saving for children’s education, rather than not saving for retirement at all.
- Check your insurance needs: Make sure that you protect the financial future of your family with sufficient life and disability insurance.
Seasoned in your career
- Review your risk tolerance: Tailor your portfolio so that it is line with your goals and objectives.
- Estimate retirement expenses: Assess the lifestyle you envision and anticipate any big costs you may encounter like medical or travel expenses.
- Plan for healthcare: Review your healthcare insurance needs you have, and keep in mind that healthcare needs typically increase in retirement.
Approaching retirement
- Retirement budget: Estimate the income you will need to take care of your retirement expenses.
- Plan withdrawal strategies that are in line your financial goals and objectives.
At retirement
- Track your spending: Keep to your budget and be mindful of withdrawals to avoid outliving your savings.
- Adjust your investments based on longevity needs: Be aware that some growth assets may still be required to account for inflation and longevity.
- You need to consider healthcare and estate planning.
Revisiting your plans
"Throughout all life stages, it is essential to review your financial plan on a regular basis and ensure that the necessary adjustments are made to align with your goals and objectives," Laubscher said.
"Getting expert advice can certainly be beneficial here, so consider partnering with a financial adviser on your journey."
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