Whether you dream of quiet beach days, launching a passion project, or simply not worrying about bills, planning ahead is the key to enjoying a comfortable retirement. While it may seem like it’s ages away, retirement has a way of sneaking up on us. By starting early and putting a few smart strategies in place, you give your future self the gift of financial security.

Here are just a few saving options that can help you get retirement-ready.

 

How Much is “Enough”?

 

One of the first questions to ask yourself is: how much do I need to retire comfortably? A helpful guideline is to aim for around 75% of your final salary as your monthly income in retirement. Start by looking at your current lifestyle - the cost of living, the kind of retirement you want, and how inflation could affect that. From there, a financial adviser can help you build a plan that fits your income, responsibilities, and goals but here’s a guide are some useful retirement tools.

 

Retirement Annuity Plans

A Retirement Annuity (RA) is like a personal pension plan and is perfect for people who are self-employed or want to top up the savings from their workplace pension. Contributions are tax-deductible (up to a certain limit), and the money is invested until you retire, helping you grow your savings steadily over time. Just remember, the terms and flexibility may vary between providers.

Provident Funds

If you’re employed, your company might offer a provident fund, where both you and your employer contribute. It’s a simple and effective way to build your retirement savings. As of 1 September 2024, provident funds (along with pension and preservation funds) now fall under South Africa’s new two-pot retirement system.

This means that your future contributions will be split into two parts:

• The Savings Pot: One-third of your contributions go into this pot and can be accessed while you’re still working – ideal for emergencies or unexpected financial needs.
• The Retirement Pot: The remaining two-thirds are locked in until you officially retire, helping you grow a stable, long-term nest egg.

When you do retire, you’ll still have the option to take a portion of your total savings as a lump sum (subject to tax), or use it to purchase an annuity for monthly income. Just be sure to check your fund’s specific rules as not all provident funds are exactly the same.

 

Investing to Supplement Your Retirement

Even with a solid pension plan, some people prefer a bit more of a financial cushion. That’s where investing comes in. Unit trusts, for example, are a popular option. Your money is pooled with other investors’ funds and managed by professionals who invest in a mix of assets on your behalf. It's a great way to diversify and grow your money over the long term, even if you’re starting with a modest amount.

 

Where Life Insurance Fits In

Life insurance can also play a role in your retirement strategy. If you have a MiWayLife policy, your loved ones receive a lump sum payout when you pass away. All of our policies include an Accelerated Funeral Benefit that pays out fast and a Terminal Illness Benefit that pays 50% of 100% of your cover amount while you’re still alive should you be diagnosed with a terminal illness.

If you’ve ticked these boxes with life cover, you might feel more confident to invest or use your retirement savings without worrying about leaving your loved ones financially vulnerable.

The Bottom Line

No one knows exactly what the future holds, but having a retirement plan (and sticking to it) is one of the smartest things you can do. Just remember, this article is a general guide and not financial advice. For a personalised plan that works for your lifestyle, it’s always a good idea to speak to a qualified financial adviser. If you’re looking for life insurance, however, why not get a quick quote from MiWayLife? Every step you take today brings you closer to a stress-free tomorrow.

Did you know:

You can now take out life cover with us online in a few simple steps. No calls and no agents! Make sure to take care of those you love today by buying MiWayLife cover online.