a-worry-free-retirement Is strategic goal setting the key to a worry-free retirement?

Saving for retirement is a long financial journey that typically begins when you enter the work world and can end long after you are gone if you have dependents.

This long journey can feel overwhelming. Fortunately, you can stay the course if you take the right approach, have clear financial goals and get the expert support you need.

Think holistically

To set suitable retirement savings goals, you need to understand the typical needs people have in retirement, and the further away you are from retirement, the more difficult it can be to comprehend the financial obligations. Do your research carefully. Once you have full visibility over your financial needs, you can set fitting goals. Don’t think of retirement as one event; set a series of goals at five year increments after retirement.

Importantly, retirement planning cannot be separated from general financial planning. Factor in other life goals that require your resources – such as protecting your ability to earn an income and ensuring the welfare of loved ones should anything happen to you.

Focus allows you to prioritise

Once you can articulate your goals, including those you may not have been aware of, you can start to prioritise your finances with the resources you have. Be prepared for the fact that you will need to make trade-offs – on big lifestyle choices like a home and car, and the little luxuries along the way.

Fortunately, goals help you to establish a path and stick to it, allowing you to shift your attention away from impulsive decisions that could cost you in the long run.

You can’t manage what you don’t measure

Setting goals acts as a benchmark against which you can track your progress, so you can continually evaluate whether you are on the best path.

This helps you to fully understand the impact of short-term decisions on long-term wealth. For example, stopping a small savings or retirement plan or even dipping into your savings can have a big impact in the long run. Luckily, the reverse is also true. Sometimes, making small adjustments is all that’s required to catch up if you have fallen behind.

Small wins add up to big wins

Saving enough for retirement may occasionally seem like a daunting task. In this case, goal setting helps to keep you motivated. For example, if you need to save R5 000 per month to maintain your current lifestyle during retirement, it may seem impossible, but it is better to start somewhere than not start at all.

If you save a little every month, understanding where you need to go, you can consistently increase your contributions until you are saving enough. When it comes to saving and investing – commitment and consistency are rewarded through compound growth.

Ready to get your financial goals on track?

Speak to a financial adviser, who can help you evaluate whether your financial goals suit your personal circumstances and needs. You can benefit from the discipline of the processes they follow to determine and make clear the options available to you. Your role is to be candid about what is important to you and to be open to engaging in frank conversations.