Cape Town – Retirement planning must take into account that savings will likely have to last longer due to people living increasingly longer because of improved medical advances and facilities, says Coreen van der Merwe, managing director of Sovereign Trust.
“Increased longevity means a lot of people have to downscale when they retire. Many people think they will travel once they retire, but the harsh reality is that especially international travel becomes more difficult then,” she told Fin24.
“At the end of the day any financial planning needs the right planner. You cannot take it lightly. You need people with sufficient experience in retirement planning.”
One of the trends noted by Sovereign in SA is an increase in retirement estates.
“It used to be that people retired close to the coast in Cape Town, Knysna and Durban, but we now see these retirement villages also being developed in Gauteng. People probably want to be close to their families and on top of that, it is more expensive closer to coastal areas,” explained Van der Merwe.
“These developments usually have long waiting lists and can be expensive. Although this might not be an issue for upper income earners, it might be a problem for average income earners.”
That is why, in her view, it is important for families to face reality and start thinking about where their parents will go when they retire.
“We all want our parents to live long, but the reality is that illnesses might require them to have access to high care facilities. So make a point of discussing early on where your parents are going to go to. Don’t wait till they are 60 or 65,” suggested Van der Merwe.
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