It has been established, through independent research and academic studies, that higher levels of wealth is achieved by those who use advisors on a regular basis. These investors have better savings habits and are more confident in their ability to meet their retirement income needs.
Research done in Australia by KPMG Econotech, found that over a selected period, investors who were using a financial advisor, saved $1,725 per annum more ($1,590 after advisor fees) than those not using the services of an advisor.
Research conducted by Ipsos Reid on behalf of The Investment Funds Institute of Canada, concluded that households of all age groups were twice as likely to save for retirement when they used the services of an advisor.
Research in the UK has yielded similar results.
As a professional financial advisor firm, Hisec is well able to assist you to understand and calculate your risk capacity, helping you to define your goals, manage your cash flow, and invest surplus funds, as opposed to those funds getting swallowed up in consumption. This sounds simple, but is the base from which provision for your retirement is built.
Retirement planning is based on two time frames in any person’s life:-
Pre-retirement planning +−
During the Pre-Retirement Phase any investor aims to save as much as possible to provide for their income requirements during retirement.
The vehicles used are mostly tax efficient vehicles whereby saving towards this need will provide tax deductions. Most provide for retirement via your corporate pension or provident fund or via retirement annuities. (Please see the interesting things to read section for more detail on how exactly these products function).
Providing for the *pre-retirement phase* achieves some major benefits:
- It provides you the comfort of living out your remaining years without having to rely on family assistance, whilst also enjoying the additional time on hand and doing some of the things you dreamed of.
- Putting money away into approved retirement vehicles is highly regulated – safeguarding you from undue risk and ensuring the money is safe;
- Any investment into these products provides you with tax benefits – effectively the government is assisting you in saving towards your retirement.
These types of investments fall outside of your estate providing additional estate duty benefits and are also safe from creditors laying claim to your savings.
At its nature, saving towards retirement is long term based. Hisec’s methodology is designed to help you be diligent year in and year out. We do more than merely being diligent. Research performed by the SA Treasury has shown that saving of 1% in costs over the long term can add as much as 40% to your invested value over 40 years. We use a specific methodology for selecting asset managers, with one of the key criteria being able to access investment funds at a discounted rate, which is not offered by all advisors.
Post-retirement planning +−
Whilst Pre-retirement is all about accumulating, Post-Retirement is about enjoyment and management of income.
At Hisec Wealth & Financial Services we believe post-retirement money is all about cash flow management. Ie. how much income can you obtain and how long will your money last?
We divide post-retirement money into three categories:
- The Conservative Silo – This provides for your immediate income needs (0 – years);
- The moderate to moderately aggressive silo – This provides for your income needs for the next 3 to 4 years; &
- The Aggressive Silo – this provides for income during later years.
Why do I need an aggressive silo when I am in retirement and cannot afford to be aggressive?
Your income needs to increase every year in order to keep up with inflation and if your savings do not grow by more than inflation over the long term, you will not have sufficient savings to draw income from over time. People live longer and longer and if your savings do not keep up with your later years, the older you get the less income you will have.
Let us assist you in achieving your retirement planning goals.
We look forward to building a lasting relationship with you.
Contact us at email or call us at 087 285 9504.