Blog

I try to set myself financial targets to keep me focused, but life often gets in the way. I wanted to be debt-free by the time I turned 40, and be able to retire by 55, but I missed the first target, and the second looks highly unlikely (I am now 44).  I spent most of my 20s studying, and most of my 30s supporting a young family and making bond repayments. Now that I am in my 40s I feel more in control, but I’ve recently taken on more debt to purchase a property, and probably set my retirement age back by a number of years! I’m fortunate to be in a good job, and able to support my family and others that rely on me, but when I’m retired I hope my monthly expenses will be more manageable.

Since I’ve been part of the PPS group I’ve contributed as much as I could to the company retirement fund-I’m invested in the PPS Balanced Fund of Funds (FoF) which can invest up to 75% in equities- and have also opened a tax-free investment account (here I am invested in the PPS Managed Flexible FoF which can hold up to 100% in equities).  Although there can be times where equities can underperform (and the past five years has been disappointing) equities remain by far the most important asset class for beating inflation over the long term. Unsurprisingly, I am a firm believer in multi-management and, outside a small Fundisa investment for my children’s tertiary education, all my investable assets are in the multi-managed funds at PPS Investments.

I try to pay more than my monthly bond payment each month and aim to be debt-free before 60. It’s quite noticeable how paying a bit more than the minimum can allow one to pay off one’s bond years earlier than the bank allows for, as this goes straight to the capital owed. I suspect though I won’t be able to retire much before 70 if I don’t want to risk outliving my living annuity as most of us underestimate how much we need to save.

Focusing on saving is just one aspect we need to consider in terms of your financial plan. Although thinking that one will live forever might inspire one to save more, it’s equally important to make sure your affairs are structured appropriately if something untoward happens - fortunately Roy McMurchie and his colleagues at PPS Fiduciary are able to assist PPS staff & clients with their wills and estates.

Of course, life is more likely to once again intervene and I’ll need to adjust my plans accordingly! In my job as custodian of our investment process at PPS Investments I am well aware that the future usually surprises, that one should try to diversify as much as possible, and be willing to adapt if necessary. One important consideration we will all need to grapple with is the impact of climate change on our future – not only in terms of how we will invest, but also the way we will consume. This undoubtedly will have an impact on my retirement strategy in ways I don’t yet fully understand.

Many of us working today will probably need to work well into our 70s to fund a retirement that could span decades. Who knows what the world will look like in 50 years, but no doubt it will be full of surprises and challenges for all of us. Being part of the PPS group gives me access to a wide range of investment professionals that can help me stick to my financial plan. It’s never too late (or too early!) for you to consult your financial adviser and have peace of mind on this important aspect of your life, with them helping coach you to stick to your own financial plan through all the challenges that life will throw at you.

By David Cosoer

Executive: Research and Investments, at PPS Investments

Disclaimer:

All information and opinions provided are of a general nature and are not intended to address the circumstances of any specific person. Kindly note that this does not constitute financial advice and it’s best to speak to an accredited and qualified financial adviser before making any decisions that may impact on reaching your financial goals.