Do you know at what age you can retire, or how much you need to save before you can?

November 20, 2014

By my calculations, I will only be able to retire when I’m 88, which not only worries me because I’ll likely be unable to work, but more so because by then I’ll probably want to be doing nothing much more than reading and indulging in hobbies (and hopefully celebrating Hello Kitty’s 70th birthday while on holiday in the Hello Kitty theme park in China).

How much do you know about your retirement savings, or when you’d be able to retire and enjoy the things you most want? If not, there’s the obvious option of seeing a financial planner to help. Momentum, who I’ve been blogging about for the last few weeks, also has a great retirement planning solution, called MySmarts.

It’s free to log in and use it, and basically you can do the maths online, and get some suggestions and solutions.With MySmarts you can work out how much you need to save in order to retire, or how much you  need to save to reach a specific goal. Sometimes people are embarrassed about their lack of financial knowledge (like me!), and the tools help to build confidence and help people to ask the right questions.

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Here’s a scenario that MySmarts can figure out a solution for: If you are 35 years old and earning R50 000 a month and would like to retire at 65 with the equivalent income, and you’ve been been saving R4 000 a month, you would have a shortfall of around R26 000 per month in retirement. To prevent this shortfall you would have to increase your savings to R8 200 per month. Most people who do these calculations are surprised at the results and the surprise is not usually pleasant. While it’s no fun to find out that you’ll have to significantly change your lifestyle to save for retirement, it’s far better to know now than be faced with the problem when you are no longer in a position to fix it.

The value of doing these calculations is the ability to tweak your finances to ensure that you know what it takes to become financially well. You can also use the MySmarts tools to work out how much your car and home instalments will increase by. The other way you can use the tools is to see how much money you will save if you reduce the terms of the loans or add in extra cash.

They say knowledge is power, and with this solution, you’ll probably be able to plan smarter and save better. See you in China one day?

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You can win!

When you register on the Momentum website and use the MyScore / My FinTrack / MySmarts / MyFiling  solutions, you could win one of three R250 000 retirements annuity plus R500 per month for five years in a savings portfolio. You’ll also be assigned a financial advisor if you win, which means the package can be tailored to your needs. Each time you log in and interact, you’ll get another entry into the draw. Winners will be drawn at the end of April 2015.

Just a reminder too that The Multiply Financial Wellness solutions are free, and you don’t need to be a member of Momentum to do them. If you are a member however, then you can earn Multiply points.

 

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