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Retirement Planning – 5 Behavioural Tips to Help Ensure a Financially Prosperous Retirement.

By Percy Gosher

(Independent financial advisor Wealth Management (Pty) LTD)

The financial system, in an attempt to be more precise, has by default, become detached from reality. It has become so quantitative, scientific and abstract, that the average person has become disassociated with it.

This is the view of Noble Wealth Management, an independent wealth management firm that specialises in retirement planning and believes that this increasing disassociation with the financial system is one of the major contributing factors for many people not realising their goal of a financially prosperous retirement.

Positively managing investor behavioural bias, through a more conscious approach to managing one’s wealth by “re-humanising” the world of investments, so to speak, is core to their philosophy of wealth management. When investors make more conscious behavioural decisions around their personal wealth, they significantly increase the likelihood of achieving financial prosperity and independence at retirement. As the saying goes, “you can’t control the markets, but you can your own behaviour.”

Life is a journey and with sound financial planning, retirement should be an eagerly anticipated destination. Here are 5 simple but often-overlooked behavioural tips that should help smooth the road to retirement:

  1. Treat your retirement fund as an untouchable investment reserved for the future.

    Don’t rely on it as a means of financing major pre-retirement events, such as marriage, birth, education or the purchase of a home. The short-term gain of accessing your pre-retiremnt savings, often results in long-term pain post-retirement.

  2. Reinvest your retirement fund in the event of a change in employment.

    Tempting as it is to live in the here and now and spend your retirement savings, rather preserve the investment. See those funds as building blocks for future security and ensure that you reinvest them for a time that will be here sooner than you anticipate.

  3. Keep pace with inflation.

    Inflation averages about 5% per year. This means that your investments need to deliver a higher return, after costs, to give you real growth. Make sure your retirement fund portfolio is suitably aligned to your years to retirement, especially over longer time periods.

  4. Stay on top of your current liabilities.

    Building up debt with the idea of settling it with funds from your after-tax retirement benefit, is like inviting a swarm of locusts to tea in your cornfield. Deal with debt as it happens.

  5. Remain steadfast and strong in times of market uncertainty.

    Financial markets are like proverbial see-saws. Don’t let a market downturn deter you from your goals. Remember, reduced growth investments now mean compromised financial freedom later. Building wealth is a process of managing risk, not avoiding it.

Noble Wealth Management offers a comprehensive financial planning and wealth management service, that assists you in making sensible decisions about your money, your behaviour to it and your relationship with it.

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