Maximising after-retirement savings

Feel free to reach out to PSG Wealth adviser  Bernice Barnard directly.

To guide you, we will explore practical ideas and suggestions to help you maximise your after-retirement savings and overcome the economic challenges you are facing. By taking proactive steps and making informed decisions, we can work towards securing your financial future and ensuring a comfortable retirement, even in the face of these current economic circumstances.

Diversify your investment portfolio:

Spreading your capital across different asset classes could reduce risk and capture potential returns. Diversification helps safeguard your savings against the volatility of any single investment.

Assess your risk tolerance:

As a retired investor, it is important to evaluate your personal comfort level when it comes to taking on risk. While higher-risk investments may potentially offer better returns over the longer term, they also come with increased volatility. Considering that you are relying on your savings for income during retirement, it is crucial to strike a balance between seeking returns and managing potential fluctuations in the market.

We recommend consulting with a financial advisor who can provide personalised guidance and help you determine an investment strategy that aligns with your risk tolerance, retirement goals, and the need for stability. By thoroughly assessing and taking into account these variables, you can make informed decisions to safeguard your savings and maintain financial peace of mind throughout your retirement.

Explore tax-efficient investments:

Even after retirement, exploring tax incentives and investment options that can help optimise your after-retirement finances remains beneficial. While Retirement Annuities (RAs) may not necessarily be within the scope of capabilities for all investors at this stage, you can still take advantage of other tax-efficient investment vehicles, such as Tax-Free Savings Accounts (TFSAs). TFSAs offer tax advantages since all earnings, including interest, dividends, and capital gains, are tax-exempt, provided you adhere to the prescribed limits set by the National Treasury. By effectively utilising TFSAs, you can maximise your savings even during retirement. It is advisable to seek guidance from a tax specialist or financial advisor who can provide personalised advice based on your unique circumstances and assist you in making informed decisions about tax-efficient investments. Their expertise will help ensure that you make the most of available tax benefits, allowing you to enhance your financial situation and enjoy a more secure retirement.

Stay informed about market trends:

Stay up to date on the South African economy and global financial markets. Keep track of industry developments, interest rate changes, and regulatory updates that may impact your investments. This knowledge empowers you to make well-informed choices and adjust your investment strategy accordingly.

Manage inflation risk:

With the help of your financial adviser, protect the purchasing power of your savings by investing in assets that have the potential to outperform inflation. However, ensure that your investment remains aligned with your risk tolerance and financial goals.

Minimise debt:

As a retiree, it is vital to prioritise debt reduction. Take proactive steps to minimise or eliminate high-interest debt before it becomes a massive financial burden during retirement. By focusing on paying off loans and credit card balances, you can free up your financial resources and create a stronger foundation for your post-retirement years. Minimising debt will alleviate financial strain and provide you with greater flexibility to save and invest for your future.

Plan for medical expenses:

Addressing rising medical costs during retirement amidst the challenging economic circumstances we face requires careful planning. For any retiree, it is essential to plan for healthcare expenses proactively. We advise consulting an expert who can help you explore the various medical aid plans and insurance options available that can help protect you against unexpected healthcare costs that may arise. Additionally, consider establishing a separate savings fund dedicated to covering medical expenses. By setting aside funds specifically for healthcare, you will be better prepared for any medical needs that may arise. This approach will provide you with greater financial security and peace of mind, allowing you to focus on enjoying your retirement without the worry of overwhelming healthcare expenses.

Regularly review and adjust your plan:

Continuously assess your retirement plan, particularly during economic challenges. Monitor your investments, reassess your goals, and make necessary adjustments. Seek professional guidance to ensure your financial plan remains on track and adaptable to changing circumstances.

Remember, seeking advice from a qualified financial adviser who understands your unique situation is essential. They can provide personalised advice and guidance designed to suit your specific needs.