10 signs you’re doing better in retirement than you think
How do you actually know whether you’re doing well in retirement? Is it having R5 million invested? R10 million? A paid-off house? Or receiving a certain amount of income every month?
After working with retirees and families for many years, I’ve noticed something interesting: some of the people who worry most about retirement are actually doing far better than they think.
The opposite is also true. Someone can have a beautiful house, expensive cars and a large investment portfolio, yet their retirement plan can be surprisingly fragile.
So, rather than focusing on one magical number, here are 10 signs that you may have built a strong retirement foundation.
1. You have a healthy emergency fund
Retirement doesn’t stop life from happening. Geysers burst, cars break and unexpected medical expenses arrive. If markets have fallen 20%, the last thing you want is to be forced to sell investments to fund an emergency.
A sensible cash reserve doesn’t just give you money. It gives you time – time for markets to recover and time to make good decisions.
2. You’ve planned properly for healthcare
Having medical aid is not enough. Ask whether your medical aid is appropriate for this stage of your life. Understand your hospital cover, chronic benefits, co-payments and exclusions, and whether gap cover is appropriate.
Most importantly, recognise that your healthcare needs at 75 may look very different from those at 55.
3. You don’t have expensive debt
Credit cards, personal loans, overdrafts and expensive vehicle finance can place enormous pressure on retirement cash flow.
Debt also reduces flexibility. Every instalment is money that must leave your bank account each month, regardless of what investment markets are doing.
The fewer compulsory expenses you have, the more options you have.
4. You have multiple income streams
Your retirement income doesn’t necessarily need to come from one source. You might have a living annuity, rental income, dividends, business interests or consulting income.
I particularly like retirees who continue earning some income doing something they enjoy – not because they have to work, but because they want to. Financial freedom doesn’t necessarily mean never earning another rand.
5. You live below your means
This might be one of the biggest signs that you’re doing well. Imagine your retirement plan comfortably allows you to spend R100 000 per month, but your normal lifestyle costs R75 000.
You have breathing room.
Markets can fall, inflation can surprise you and unexpected expenses can arrive without immediately threatening your retirement.
Wealth isn’t only about how much you have. It’s also about how much you need.
6. Your assets are properly insured
By retirement, you’ve already done the difficult part: you’ve accumulated assets. Make sure one unfortunate event doesn’t undo decades of work.
Review your short-term insurance regularly. Check your vehicles, household contents, building cover, specified items and excesses.
7. You’ve reviewed your long-term insurance
Your insurance needs at 65 should probably look very different from those at 35. You may no longer need the same level of life cover, but other risks may still require protection.
The goal isn’t to keep every policy forever. It is to keep the insurance that still has a job to do.
8. You’re still investing for growth
Retirement can last 20 or 30 years. Moving everything into cash at retirement might feel safe, but inflation creates its own risk. The money you need soon should generally be treated differently from money you may only need in 10 or 20 years.
Retirement isn’t the end of investing. It’s simply a different phase of investing.
9. You have a clear retirement plan
There is a significant difference between having investments and having a retirement plan. R15 million invested tells me surprisingly little on its own.
How much do you spend? Where will your income come from? How is your portfolio structured? What happens during a market crash? What if you live to 100? A retirement plan isn’t supposed to predict the future. It should prepare you for it.
10. Your estate plan is in order
Ask yourself one uncomfortable question: if you died tonight, would your family know what to do tomorrow? Your will should be current, beneficiary nominations correct, and important documents accessible.
Estate planning isn’t simply paperwork. It is one final act of financial planning for your family.
Ultimately, a successful retirement isn’t determined by one magical number. It’s about how your cash, healthcare, debt, spending, insurance, investments, retirement income, and estate plan work together.
That, to me, is what proper financial planning is really about.
Comments