Tips to help you put your retirement plan into action

Planning for retirement can seem like a daunting task. However, what ultimately controls whether or not you retire comfortably, is what you do after you figure out your strategy. Here are some tips to help investors stay on track.

Tip 1: Be goal-orientated

• Specific - it should not be ambiguous or vague, rather state exactly what you need
• Measurable - this is necessary so you can quantify progress so you can achieve it
• Achievable - it should not be extreme, but something realistic
• Relevant - you must set goals that matter and
• Time-bound - you must set your goal within a defined time frame.

When planning for a very long-term goal like retirement, it helps to set medium- and short-term goals so you can experience a sense of progress as you achieve them. An example of a short-term SMART goal would be, "I want to save an extra R500 every week of this year so that by the end of the year, I can make an extra lump-sum investment into my retirement annuity."

Tip 2: Get good advice

From whom? From a financial adviser or planner, of course! No one is better qualified or more knowledgeable about the ins and outs of retirement planning. Even if you're fairly comfortable mapping out your retirement on your own, getting a second opinion won't hurt. And the earlier in your planning you speak to an adviser, the better off you'll be.

Tip 3: Stay flexible and patient

You'll probably have to adjust your retirement plans at some point, and that's fine! Adjusting for life events and personal changes won't throw you too far off course, but be careful of panicking when the markets change.

The great thing about saving for retirement is that it's long term, so there's never cause to impulsively sell your assets or get rid of your shares. Over time, the markets will even out again and your investments will recover; the law of averages and patience will in all likelihood see you through.

If you are seriously concerned about how your investments are performing, speak to your financial adviser. Then you can start to remedy the situation.

Tip 4: Preserve your savings by not cashing out

Even if you're under financial strain, don't be tempted to take a cash pay-out from your retirement savings when you change jobs. You'll lose out on compounding and increase your required retirement contribution level, plus you'll have to pay tax on the amount. Rather transfer your pension or provident money straight into a preservation fund - learn here why this is so important.

Wanting to use retirement savings on what you believe to be 'a worthy cause', such as settling an outstanding debt, is understandable. But withdrawing any money from your retirement fund will set your retirement goals back a great deal, which is very hard to recover from. It also entails a lot of admin. Rather sit down with a professional, like a money coach or debt counsellor, and brainstorm ways to cut your expenses or raise money another way.

Tip 5: Whenever you can, save more

If for some reason you receive an unexpected lump-sum payment, like a yearly tax refund or an inheritance, think seriously about topping up your savings before you spend any of it. Get advice on how to maximise the sum strategically, so you can work the system to your advantage. For example, if you reinvest your tax refund straight into your retirement savings, you can qualify for a further tax deduction.

Don't give up! Your dedication will be rewarded

Re-evaluate your retirement plan every few years to check if it's still appropriate. And don't forget to take pride in your progress! Tracking your progress can give you confidence and peace of mind that you're making wise and healthy financial choices for your future.