What are the biggest money mistakes retirees typically make?
Not having a tax efficient retirement strategy.
A combination of retirement funds (and other funds, e.g. unit trusts and living annuities).
Continue contributing to a retirement annuity.
Tax Free Savings Accounts
Tax rebates for interest
Being too conservative with investments.
Your assets need to last for another 25 to 35 years. There is a huge risk of outliving your money if investments don’t grow by more than inflation. You must have adequate exposure to growth assets such as shares and property.
Failing to appreciate the power of personal spending decisions.
You have little control over market returns (or what Zuma does).
However, you do have control over your spending habits.
Have a budget and stick to it (and redo it annually, or when your circumstances change).
Supporting adult children.
Manage your support very carefully; you have limited time and capital available to correct your financial position.
You must have these discussions with your children, otherwise they might be looking after you once your capital has run out.
Being over invested in your house.
Ensure that your home is not your biggest asset (unless it is an income generating one).
Not creating an estate plan.
Ensure you will and all your beneficiaries on your investments is up to date.
Understand the various investment vehicles (e.g. living annuities go straight to the beneficiaries and don’t form part of your estate).
Spending too much early in retirement.
Control your expenses.
Balance your desire for travel or leisure activities with the need to preserve capital over your lifetime.
Not being on the same page as your spouse.
You need to have common goals and an understanding of your financial position so that there is agreement on how money is spent.
Ensure that either party can manage finances in the event of one spouse passing away.
For more detail; listen to the interview in the audio below.
Enter your email address in the form below to receive a newsletter containing the most-read articles of the week from Bruce Whitfield’s The Money Show every Friday morning in your inbox.
Recommendedby THE NEWSROOM
Returns are low, interest rates are dropping and politics are uncertain. Tips from personal finance guru Warren Ingram...
The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.
RA not doing well? Perhaps its fees are too high? You don’t have to stick it out!
5 reasons retirement funds rule (compared to the alternatives), according to Corporate Consultant Erhard Theunissen.
Is there a single best way to build your wealth so you can retire with dignity? Yes, there is, despite costs and limitations.
Revelations published today show how the premier's sons and Free State govt appear heavily involved in the Gupta-owned companies.
The EFF lawyer stole the show during the state capture report court battle.
Flux Trends founder Dion Chang gives five reasons why he believes getting a degree is past its sell by date.
WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...
Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?
The National Student Financial Aid Scheme (NSFAS) will pilot a new funding model in 2017. NSFAS chairperson Sizwe Nxasana explains.