[Promoted] Three classic errors retirees should avoid
, just 7% of respondents feel confident that they are on course for financial independence in retirement, with the other 93% accepting that they will probably have to supplement their income after they retire. Below, Andre Tuck, Senior Investment Consultant at 10X, outlines three common financial mistakes for retirees to watch out for.
Healthcare is an important area to consider when planning your retirement budget. According to Statistics SA, most causes of death in South Africa are attributed to non-communicable diseases, such as stroke or heart disease, manifesting in late ages. The cost of hobbies – such as travel, eating out, sports and other entertainment – can really add up. Create a detailed and realistic budget to help you to manage your money, instead of allowing it to control you.There is no doubt that high fees are a contributing factor in South Africa’s retirement crisis. Seemingly small regular charges against savings compound to leave a large hole in pensions.
At the industry’s average fee of almost 2% pa they would be paying costs of around R96,000 pa , meaning they are paying themselves only two-thirds more than the service providers. Or, from another perspective, almost 40% of the drawdown goes on fees.Panic selling when the market is down Based on global life expectancy figures , individuals who retire at 60 are likely to live another 15 years or more, which means they have time on their hands to ride out bouts of market weakness and recover any losses.
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