Make the next steps before retirement count

By Janice Roberts
Editor
For many people, the “Empty Nester” stage of life means reconnecting as a couple, reassessing personal goals, and toying with the thought of downscaling. You may even start working on that bucket list of adventures you’ve been saving for.

For many people, the “Empty Nester” stage of life means reconnecting as a couple, reassessing personal goals, and toying with the thought of downscaling. You may even start working on that bucket list of adventures you’ve been saving for.

At 62, Patrick and his wife have come full circle. Their son is financially independent and has moved out, and their daughter is off travelling the world, so it’s just the 2 of them again.

But, 62 is the new 52 and Patrick’s not ready to retire just yet. He plans to work until he’s at least 70. Now, well-established, his business is thriving, and he still enjoys his role. He’s comfortable knowing he’s made provision for a smooth transition when the time comes to retire, that his life’s work will continue without him, and his staff will be taken care of.

Patrick is now what life insurer FMI (a Division of Bidvest Life Limited), calls an Empty Nester: in their early 60s, the kids are financially independent, and they have little or no debt. His risk profile has shifted over the past few years, but incredibly, even at this age, temporary injury or illness is still Pat’s biggest risk before retirement. FMI’s risk stats suggest that a 62-year-old man stands a 57% chance of sustaining a temporary illness or injury, compared to a 24% chance of a critical illness and a 10% chance of a permanent disability¹.

“If you’re in the Empty Nester stage of your life, this is a critical phase to secure your retirement future and ensure you can go on making your impact on those around you. Make this stage count by talking to an adviser and protecting the income that’ll support the retirement you’ve always imagined.”­ Brad Toerien, FMI Chief Executive Officer

Protect your income while you’re still earning it

So, what should Patrick’s top priority be? “As an Empty Nester, now’s the time for him to make the most of his income while he’s still earning it – and make sure it’s protected,” says FMI Chief Executive Officer, Brad Toerien.

At the same time, with retirement around the corner, it’s important to continue to save and invest as much as he can. And with Patrick’s health being top of mind at this stage of life, the need for critical illness cover has never been greater.

At his current earnings, if Patrick were to lose just 3 months of income due to an injury or illness, it could end up costing him as much as R295,000 through lost savings and investment growth by the age of 65². This amount would require him to work for an extra 7 months past retirement age to make up this lost income.

FMI says it’s time for South Africans to challenge every notion they have about life insurance. First, customers should insure themselves against their most likely risks (injury, illness and critical illness) that could prevent them from earning an income – both for a short while, as well as for an extended period of time. Secondly, they should choose to protect themselves with income benefits, as opposed to large lump sums. Income benefits simply replace your monthly income, so you’re able to continue living comfortably without compromising your financial stability.

1. Risk stats calculated for 62-year old before retirement age of 70.

2. Based on FMI’s Retirement Calculator – calculation based on the following assumptions: Age 62, current gross monthly income R70 000; 6.5% annual salary increase; 15% of salary saved towards retirement and R2 million already saved thus far.

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