‘Most people simply cannot afford to retire’: Over-60s share what they’ve learnt
With the increased cost of living, managing your money in your retirement years can be a challenging exercise for many.
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Who better to learn retirement lessons from than over-60s who have already retired and now have to live with the “should have, could have and would have” and the consequences of their financial decisions in their working years?
Running out of money during your retirement years is a prime concern for many retirees. Although people have reasons to be concerned with the increase in economic pressure and the cost of living, consumers can reduce the risk of running out of money in retirement with proper financial planning and sound money management tools.
The recent 2023 FNB Retirement Insights survey shows that responses from participants over the age of 60 revealed that only 21% of respondents in this age group are fully retired, while the majority are either still working full-time (38%), part-time (7%), or retired but still have a secondary source of income (33%).
“Most people simply cannot afford to retire or are forced to make major cutbacks to their lifestyle during their retirement. The fact is, even if you planned and saved carefully for your retirement years, you will still need to carefully manage your income, investments and expenses to sustain your reserves,” Samukelo Zwane, product head of FNB Wealth and Investments, says.
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Valuable lessons on retirement planning
The survey participants older than 60 shared these valuable lessons on retirement planning:
- It is important to ask experts for advice. Seeking financial advice and guidance ahead of and during your retirement years is important. This could be the make or break for you in sustaining your retirement savings and ensuring that your money works for you and your loved ones.
- Diversify your income sources. Consider income diversification options such as investments, side-hustles or less demanding consultancy work to keep your income stream moving well into your retirement. This will lessen heavy reliance on your retirement income to sustain your lifestyle.
- Manage your money wisely. When you retire, changes in your day-to-day life will change your spending patterns. Therefore, it is a good time to look at your budget with a different lens or new perspective. Reduce costs wherever possible on needs as well as wants. You might not be able to change some fixed expenses, like rent or a bond, but you could look at reducing expenditure on variables.
- Always practice financial discipline. Look at your purchases over the past few months and identify spending habits you can eliminate. It might be a membership you do not use any more, or maybe you started cooking more meals at home instead of going out to eat as often. Keep a diary to track your spending.
“Although retirees may not have a steady income like they did before retirement, it is still possible to save money so that they have more to spend on what is important to them, either by managing or reducing their expenses and leveraging some of their banking benefits,” Zwane says.
