Many people in their 40s are balancing the need for retirement saving and the desire to live a comfortable life, so have to make good decisions to achieve both simultaneously.
This can only be done through a strategic combination of living, spending, saving, and investing.
If you are in your 40s, there are three tips to help you make good financial decisions:
1. Be prepared to join the ‘sandwich’ generation
South Africans are among the worst savers in the world, and so Mariska Oosthuizen, chief marketing officer at Sanlam, says this ‘sandwich generation’ is now paying the price.
“The term sandwich generation refers to the group of people sandwiched between needing to care for their children and needing to take on the financial care of their older relatives.
“This typically happens around your 40s and 50s and can be an exceptionally stressful life stage.”
People in their 40s need to take care of their finances, which means resisting the temptation to dip into their savings to support older relatives, she states.
2. Stay focused on building a financially confident future
Your 40s can be a financially demanding life-stage as your budget is stretched due to increases in the cost of living as well as taking care of your children’s education and paying off your bond.
However, Oosthuizen says you should resist any urge to cash in on your retirement savings prematurely to take care of these expenses.
In your 40’s you have around 20 years until retirement, so use this time wisely to continue building up your nest egg.
3. Get your affairs in order
Your 40’s is a perfect time to ensure that your affairs are in order, says Kirsten Smit, advisory partner at Citadel Wealth Management. After all, you probably have dependents such as spouses, children, and parents.
It is therefore essential that:
– your will is up-to-date and in line with your long-term estate planning strategy
– your beneficiary nominations on your policies and retirement products are accurate
– you have sufficient risk cover in place should something happen to you, and you are no longer in a position to earn an income either through death or disability.
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