How to retire comfortably
Retirement Funding is often neglected because retirement is ”far away” from today’s worries. However, if you are fortunate enough to attain retirement age, you would not want to be financially dependant on your family, the State or another job.
You would like to enjoy the fruits of your labour.
Actuaries have calculated that if you save 13% of your salary for 35 years and your investment return exceeds inflation by 4% per year, you should be able to replace 70% of your salary earned immediately before retirement. This will in all likelihood provide you with the same, or greater, amount of spending money as disposable income before retirement.
If you pay 25% of your salary to your house mortgage, which you must try and pay off before retirement, and 13% towards savings, you spend roughly 40% already, and 70% replacement would therefore provide you with 10% more “spending money”.
Another easy calculation to see whether you have saved enough for retirement is to take the amount you require as a monthly pension and multiply this with the time you require the pension,
e.g.: N$ 1000 per month (pension) x 12 (annual pension) x 20 years
(provision) = N$240 000.
Government has made it easier with the last budget tabled in parliament allowing a tax payer to deduct up to N$1500 000 per annum for retirement and tertiary education provisions.
You would like to enjoy the fruits of your labour.
Actuaries have calculated that if you save 13% of your salary for 35 years and your investment return exceeds inflation by 4% per year, you should be able to replace 70% of your salary earned immediately before retirement. This will in all likelihood provide you with the same, or greater, amount of spending money as disposable income before retirement.
If you pay 25% of your salary to your house mortgage, which you must try and pay off before retirement, and 13% towards savings, you spend roughly 40% already, and 70% replacement would therefore provide you with 10% more “spending money”.
Another easy calculation to see whether you have saved enough for retirement is to take the amount you require as a monthly pension and multiply this with the time you require the pension,
e.g.: N$ 1000 per month (pension) x 12 (annual pension) x 20 years
(provision) = N$240 000.
Government has made it easier with the last budget tabled in parliament allowing a tax payer to deduct up to N$1500 000 per annum for retirement and tertiary education provisions.
So there can be no reason to neglect retirement planning. Either pay your full tax or use some of it to save for retirement.
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