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Every day, when the work laptop gets shut and I power down for the day, I take a deep breath and remember I am one day closer to retirement.

The only thing missing from that picture above is a cold beverage in one hand. Oh, and maybe some snacks. Always be snacking.

I also buy lottery tickets each week, because ‘tata ma chance‘ and all that, but retirement will be far less rewarding if I haven’t adequately prepared financially.

It’s daunting, yes, but there really is no time like the present to start planning for the day you get to hang up the metaphorical work boots.

So just how much is enough, and how much should you put away each month to ensure you’re ticking all the boxes?

According to Andre Tuck, a senior investment consultant who spoke with BusinessTech, the basic rule is to ensure you’re saving at least 15% of your monthly income, for the entire 40-odd years you’re working.

That ship has sailed, and I plan on working fewer than 40 years if I can help it, so Tuck also laid out a three-step ‘guesstimate’ way to work out how much you’ll need for retirement.

Multiply your final annual salary by 15

If you earned R30 000 a month in your final year, after tax, then you would be pulling in R360 000 a year. By the metric above, you would need a lump sum 15 times that (R5,4 million) in order to live comfortably.

Save R1 million for every R5 000 you want to draw down as a pension every month

Assuming you’re drawing from an annuity upon retirement (chat to a financial expert about whether or not this is the right choice for you), if you wanted to keep on getting R30 000 a month post-retirement, you would need a R6 million lump sum saved up.

Multiply your monthly needs by 300

Bust out the calculator, crunch your budget, and work out what you need to survive comfortably each month.

Using that figure of R30 000 a month again, you would ideally like to have R9 million tucked away.

That figure is well in excess of the R5,4 million and R6 million figures arrived at using the other two methods, but it always pays to have something extra stashed in the bank because of the unpredictable nature of retirement.

Ultimately, the most effective way to save money is to start early, and to ensure that your money works as hard as you do during the period you’re saving.

The consequences of decisions made today will bear fruit over the years, based on the sound principles applied at their inception, which is something Consequence Private Wealth knows all too well.

As part of their investment management services, they diversify capital across a range of investment instruments, mixing unit trust funds, hedge funds, and share portfolios, with expertise in both local and offshore investing, as well as retirement funding vehicles.

You might find their extensive expertise beats your ‘guesstimates’.

Happy retirement, and may it come sooner rather than later.

[source:bustech]