Live comfortably in final stages of your life

From your early forties until about five years before you reach retirement is the best time to put gas in your retirement savings and ensure you live comfortably in the final stages of your life.

This is according to Nshalati Hlungwane, institutional clients manager at Allan Gray. 

“As we mature in our careers, and our salaries rise, we typically enter the peak of our accumulation phase. This presents an opportunity to make up for lost time by rectifying any mistakes we made, or accounting for any disruptions to our contributions in the first phase of our retirement planning,” said Hlungwane. 

She further explained that to get the most from this phase, people should maximise their contributions through their employer or in their personal capacity.

“It’s also a good time to adopt an ‘income mindset’ by assessing how your savings translate into a sustainable monthly income in retirement. This helps gauge if you’re on track — and gives you time to adjust your plan, if needed. A financial adviser or online retirement calculator can assist with these projections,” she said.

According to her, a successful retirement depends on managing both your finances and your time. 

“The five years before retirement are key to reassessing your goals, envisioning how you’ll spend your free time and evaluating your readiness.

“Some may choose to delay retirement or explore new income streams; others may pursue passion projects or give back. These are personal decisions that require balancing your finances with your vision for a meaningful retirement — taking time to plan makes the transition smoother.”

It is an old, well-known adage that time is crucial when it comes to retirement investing and the earlier you start the better. While it may feel like there’s plenty of time early in your career, starting sooner lets you benefit more from compound interest.

Hlungwane said growth is necessary during the early part of the retirement investment journey.

“A higher allocation to volatile assets like equities early on can boost long-term returns, but investors must be prepared for short-term ups and downs. Market fluctuations typically smooth out over time — losses only become real if you disinvest out of fear,” said Hlungwane.

Hlungwane and counselling psychologist Dr Hannetjie van Zyl-Edeling emphasises the importance of not only developing a financial portfolio for retirement, but also focusing on psychological, health and social portfolios.

In other words, it is crucial to think about your needs holistically as you plan for the years to come. 

“Remember that retirement is not the end of your investment journey, but the beginning of the next stage of your life. The risks to manage closely at this time are the risk of capital loss, the risk of an investment not keeping up with inflation, and the risk of outliving your income or accumulated savings,” said Hlungwane.

She says that estimating longevity is complex and best tackled with professional assistance. An independent financial adviser can help with managing risk and implementing an appropriate post-retirement investment drawdown strategy.

“As with any worthwhile journey, starting late — even though it means needing to accelerate harder — is better than not starting at all.

“Preparing for retirement holistically ensures it truly will be the enjoy phase of your life,” said Hlungwane.

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