How much do you really need to retire?
5 min read
Retirement planning is more crucial than ever for South Africans. According to an article by Daily Investor, 89% of South Africans plan to work part-time post-retirement due to insufficient savings, with 40% relying on asset sales, family support and social grants to maintain their lifestyle. This raises a critical question: How much do we really need to retire?
This concerning trend is primarily attributed to the absence of a savings culture, along with other contributing factors such as a lack of retirement planning or insufficient funds for retirement.
Brad Winstanley, commercial director at Devmco Group charged with developing the popular retirement village within Salta Sibaya estate, explains: “Although the prospect of saving may seem daunting, planning ahead of time for retirement ensures the lifestyle you desire at the end of a hard-earned career can be truly fulfilled.”
A recent article published by BusinessTech reported insights from Fidelity Investments indicating that in 2023, the general guideline for retirement planning suggests saving 10 times your income to comfortably retire by age 65 while sustaining your present lifestyle. This benchmark is flexible and can be tailored depending on whether you aim to retire earlier or later.
However, the journey to retirement in South Africa is far from standardised. Winstanley points out, “The path to retirement is unique for each individual, with the required retirement fund based upon personal circumstances, aspirational goals, and an array of external factors, including lifestyle choices, health considerations, inflation rates and anticipated investment returns. At Capri Village, we have created an offering that caters for varied budgets and lifestyle choices, when people are looking to move into their final home.”
As the question of how much one needs to retire remains subjective, it is crucial to consider these 10 key aspects when planning for a comfortable retirement:
- Define your retirement goals, outlining the desired lifestyle and financial objectives.
- Calculate anticipated expenses, considering factors like housing, healthcare and inflation.
- Assess your current financial situation by evaluating savings, investments and debts.
- Develop a realistic budget that aligns with your retirement goals.
- Create an emergency fund for unexpected expenses.
- Research and plan for healthcare costs, including health insurance premiums.
- Understand potential income sources, such as pension benefits.
- Strategically invest your portfolio and consider the impact of taxes on your retirement income.
- Be mindful of inflation’s effect on purchasing power.
- Regularly review and adjust your retirement plan to adapt to changing circumstances.
Winstanley emphasises, “It is imperative to think about what you envision retirement to look like before entering this chapter, so that you are well prepared. Apart from the financial aspects, many people actively search for a solid investment when retirement age draws near, often prioritising quality healthcare and preferring to be closer to their loved ones.”
One key consideration, and arguably the most important, is where you will live. There are few estates that cater to the holistic lifestyle envisioned by active individuals over 50.
Capri Village, nestled on the North Coast, provides residents with secure living and a range of amenities suitable for those seeking active lifestyles. Amenities include padel, tennis and bocce ball courts, clubhouses, heated indoor pool and a library. Its strategic location within Salta Estate allows for multigenerational living, offering the unique advantage of proximity to family members. Residents will also have immediate access to primary healthcare provided by Totalcare. Great consideration has been taken by the Devmco development team to ensure Capri Village meets the needs of residents, providing stepless, pet-friendly units, each with a private garden.
Going beyond traditional retirement offerings, this development invites individuals over 50 to choose from a variety of residences, including 2-, 3- and 4-bedroom homes. Prices start from R1 295 000 for land and R2 705 000 for homes.
Listen to the Devmco podcast about Navigating Retirement here.
Main image credit: Towfiqu Barbhuiya/Unsplash
