With the increased cost of living, managing your money in your retirement years can be a challenging exercise for many. Running out of money during one’s retirement years is a prime concern for many retirees.
Although people have reasons to be concerned with the rise of economic pressures and the cost of living, consumers can lessen 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 reveal that only 21% of respondents in this age group are fully retired, while the majority are either working full-time (38%), part-time (7%), or retired but still have a secondary source of income (33%).
Samukelo Zwane, Product Head of FNB Wealth and Investments, says, “Most people simply cannot afford to retire or are forced to take major cutbacks on their lifestyle during their retirement age. The fact is, even if you’ve planned and saved carefully for your retirement years, you will still need to carefully manage your income, investments and expenses to sustain your reserves.”
Below are some valuable lessons on retirement planning shared by the survey’s participants aged above 60:
- The importance of seeking expert advice – Seeking financial advice and guidance ahead of and during your retirement years is pivotal. 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 your heavy reliance on your retirement income to sustain your lifestyle.
- Manage your money wisely – Changes in your day-to-day lives have resulted in changes to our spending patterns. This is therefore a good reason to look at your budget with a different lens or new perspective. Reduce costs wherever possible, both on needs and wants. You might not be able to change some fixed expenses, like rent or bond, but you could look at reducing expenditure on variables.
- Always practice discipline – Look at your purchases over the past few months. Identify spending habits that you can eliminate. It might be a membership you don’t use any more, or maybe you start 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’s still possible to save money so that they have more to spend on what’s important to them, either by managing or reducing their expenses and leveraging some of their banking benefits. For help on how to manage and sustain your finances during your retirement years, consult your private advisor for some guidance,” concluded Zwane.