Retirement is more than just a financial milestone—it’s a whole new chapter in life. While many people look forward to the freedom retirement offers, being truly ready requires careful preparation across several areas. Here are five critical questions to help you determine if you’re on track for a secure and fulfilling retirement.
1. Do You Have Enough Saved to Sustain Your Lifestyle?
The cornerstone of retirement readiness is ensuring you have the financial resources to maintain your desired lifestyle. To get there, ask yourself:
How much will you need annually? Include housing, healthcare, travel, and leisure in your calculations.
Have you accounted for inflation? Prices for goods and services will rise, so your savings must grow to keep up.
Will your savings last 20+ years? With people living longer, your retirement plan should reflect this extended horizon.
At Family Wealth Custodians, we break retirement into three distinct stages:
The Go-Go Years: Typically the first decade of retirement when you’re most active. You may travel, pursue hobbies, and spend more on experiences. Income needs are often at their peak.
The Slow-Go Years: Activity starts to slow, but expenses may shift toward healthcare and maintenance of your lifestyle. Income requirements may stabilize or slightly decrease.
The No-Go Years: The later years of retirement when health considerations dominate, and discretionary spending often declines. However, healthcare costs can rise significantly.
Each stage has unique financial demands, so your plan must account for these shifts.
2. Are You Debt-Free or Close to It?
Debt can be a significant burden in retirement, eroding your savings and limiting your financial flexibility. Evaluate your liabilities:
Mortgage: Ideally, your home should be paid off or close to it by the time you retire.
Credit Cards and Loans: High-interest debt should be eliminated before retirement.
For instance, I once advised a widowed retiree client to cut up her credit card altogether. While credit cards might offer rewards or mileage benefits, in my experience, these are often not worth the hassle in retirement. Instead, focusing on living within your means provides far more peace of mind.
3. Have You Planned for Healthcare Costs?
Healthcare expenses can be one of the biggest challenges in retirement. Consider:
Do you have comprehensive medical aid coverage? Ensure your plan suits your needs, especially as you age.
Have you set aside a healthcare fund? Out-of-pocket costs for medications, procedures, and long-term care can add up quickly.
It’s worth noting that the average price hike for 12 of South Africa’s biggest medical aid schemes for January 2025 is 10.7%—much higher than the expected inflation rate. In my experience, healthcare inflation is one of the most significant derailers of retirement plans. Planning for this early can save you from major stress later.
4. Do You Know How You’ll Spend Your Time?
Retirement isn’t just about financial readiness—it’s also about finding purpose and avoiding the pitfalls of boredom or isolation. Ask yourself:
What activities or hobbies will keep you engaged? Travel, volunteering, or learning a new skill can make your days fulfilling.
How will you maintain social connections? Loneliness is a significant challenge for retirees, so staying socially active is critical.
Are you emotionally ready to leave your career? Planning for the emotional aspects of retirement is just as important as financial preparation.
According to a study by Peltzer and Phaswana-Mafuya (2013), depression is a significant public health concern among older South Africans, with isolation and loss of purpose being two of the biggest contributing factors. Addressing these issues proactively can lead to a healthier, happier retirement.
5. Have You Protected Your Legacy?
Planning for your legacy is essential, but it should never come at the expense of your retirement security. Consider:
Do you have an up-to-date will? Ensure your assets are distributed according to your wishes.
Have you considered estate planning? Tools like trusts can minimize taxes and protect your family’s inheritance.
Do you have life insurance? This can provide for your loved ones and cover any outstanding liabilities.
While leaving a legacy is important, I often remind clients to prioritize their own retirement needs first. Unfortunately, I’ve seen too many retirees sacrifice their enjoyment out of concern for leaving money to their children. A balance must be struck so you can live your retirement years to the fullest while still planning for your family.
Final Thoughts
Retirement readiness is about more than just savings—it’s about creating a plan that addresses every aspect of your life, from finances to health to emotional well-being.
If you’re unsure about where you stand or need guidance to prepare for the next chapter, let’s talk. Together, we can build a plan that ensures you’re truly ready to embrace retirement with confidence and peace of mind.
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