Sure You Can't Save More?

Given the current economic environment, it is simply too difficult to save more, right? But your future retired self will thank you for every extra cent that you manage to put away. And the first steps to increased savings are basic.

- Schalk Louw

We find ourselves in a market that hasn’t shown any real growth over the past five years. Even the most optimistic investors are now starting to panic, especially those who have already retired. With the cost of living rising rapidly, many pensioners are forced to increase their withdrawal rates to well above the recommended levels, in an environment that just hasn’t provided sufficient growth to sustain such high withdrawal rates these past few years.

Aside from feedback from the retirees I work with daily, enough research has been done over the years to determine what retirees would have done differently, had they been given the opportunity to start over. It will come as no surprise that most of them claimed that, given a second chance, they would have saved more and would have obtained proper advice well before retirement.

Despite these observations, however, I still get the impression that the South African public does not realise how important it is to save as much as possible prior to retirement – not even given the opportunity to learn from the mistakes of others. I hear too many excuses about how the cost of living doesn’t allow people to save a single cent. I do agree that these costs are on the rise, but it doesn’t really help that many of these people are also living well above their means.