How to make your savings last in retirement

While retirement may be an exciting and fulfilling experience, long-term financial security and stability need careful planning.

According to the First National Bank Retirement Insights Survey 2024, one of the top worries for retirees is making sure their money lasts.

The survey showed that South Africans retiring overestimate their savings while underestimating their costs, resulting in major financial challenges throughout their golden years.

With the cost of living steadily rising, retirement planning becomes increasingly crucial.

Here are four tips to consider when planning for retirement:

Have an emergency fund

Building up an emergency fund is critical for protecting oneself from unanticipated occurrences. One to three months’ income should be kept in a fund that can be accessed in fewer than seven days.

Actively reduce reliance on unsecured debt

Using debt to support a lifestyle can have an influence on long-term financial resilience, especially if money is being paid in interest. Spend no more than 15% of your income on unsecured credit, which includes overdrafts, personal loans, and credit cards.

Protect yourself against loss with insurance and medical cover

Having house and auto insurance can protect you from unforeseen expenses in the case of an accident or incident.

Ensure that your yearly coverage is adequate and appropriate for your requirements. The need for medical care and treatment rises with age, therefore having the right insurance coverage can help reduce out-of-pocket expenses, especially in situations when hospitalisation is required.

Have the right mix of investments

When investing your retirement funds, selecting the correct combination of investment asset classes is critical to ensure that your money lasts until retirement.

People over the age of 60 have traditionally favoured more conservative or defensive asset classes, such as cash investments. However, including growth assets in a portfolio is a tried-and-true approach to outperform inflation over time. – IOL