Can one save enough in 45 Years to cater for 35 Years of Retirement?

By:  Kim Whitmore

As the saying goes: Go to school,then university, get a degree, find a secure job and you will be sorted, but is this enough today?

Next year, at age 22, I will start work as a graduate and like most of my peers, will probably retire at 65.

How many years to save for retirement?

On average, my family lives to the ripe old age of 95. So, if I want to be ‘safe’, I need to save enough money to live until I am 100 years old. Unfortunately this is way above the South African national average and consequently retirement funds do not make their calculations based upon a life expectancy of 100 years.

So, taking the above scenario into consideration, I have calculated that in 43 years, I must earn sufficient money, to not only provide for my active working years, but also for 35 years of saving for retirement. I have to save as well as cover other commitments such as medical expenses, schooling for children, car and bond payments, household expenses and the odd holiday.

How do I do this with savings or unit trusts or retirement annuities that produce interest that barely keeps pace with inflation? When I do the numbers, this converts to having to save roughly half of 43 years of my salary to be able to cope with retirement…Eeish!

At the age of 17, I was in a serious car accident and instantaneously realised that an accident can happen at any moment which could prevent you from working for the rest of your life. Clearly an alternative solution is required.

What is the solution?

With this in mind, one should constantly search for alternative sources of income (apart from a salary) which will provide passive income that once in place, do not require constant supervision. My research has shown me that property seems to be an answer and I am exploring buy-to-let investment properties as I have seen on Organic Growth. They have shown me a plan to retire early without costing me half my income!

So what happens if you outlive your retirement? Is your plan to have enough children who will look after you in your old age? And are you willing to be a burden on them and their spouses?

Or perhaps your health will allow you to resume working at the age of 80 or 90 years old?

For an independent woman like myself, I want to know that I can take care of myself even if I live for a full century.

What do you have planned for retirement?

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