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10 Working Years Could Cost You 20 Years Of Retirement

Retire at 55 and live to 80; work till you’re 65 and die at 67. Startling new data shows how work pounds older bodies.

Alec Riddle

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Imagine working as long as you possibly can, or until your maximum retirement age, to ensure you have sufficient funds for your Retirement, only to die within two years of retiring

An actuarial study conducted on some of the larger US Pension Funds including Boeing Aerospace, indicates that employees who retired at the age of 65, died within two years of retirement.

Dr Ephrem (Siao Chung) Cheng provided the results from an Actuarial Study on the correlation between Retirement Age and Longevity.

The studies were based on the number of Pension Fund cheques sent to Boeing retirees. The Boeing experience was that employees retiring at age 65 received pension cheques for 18 months, on average, prior to death. A similar experience was discovered at Lockheed Martin, where on average, employees received pension cheques for just 17 months.

Apparently the experiences at Ford Motor Company and Bell Labs were similar to those of Boeing and Lockheed. Statistics at a pre-retirement seminar illustrated that the average age of retirement at most large corporations in the US was 57. So people retiring at age 65 are a minority, but it is still a startling statistic.

Hard work can age you

The thought is that the hard working late retirees (65) are more than likely putting too much stress on their ageing bodies and minds and due to the stress, they develop a variety of health problems. The associated stress induced health problems lead to them dying within two years of retirement.

Another startling statistic from the same Corporations is that those who retire earlier, say age 55, tend to enjoy their retirement on average for more than 25 years.

The chances are that those able to retire earlier have less stress, have planned and managed their lives better with respect to finances, health and career and are able to retire comfortably.

One important observation is that these younger retirees (55) aren’t necessarily idle in retirement, but they are far less stressed than their working counterparts from age 55 to 65. This means they may be busying themselves with part time work, hobbies and things they enjoy doing, so much so that ‘work’ becomes fun and is done at a more leisurely pace.

Plan to retire early

People should plan their careers and their finances, enabling them to retire, or at the very least be financially independent, as early as possible. This will ensure they are able to enjoy a longer, happier and more leisurely retirement to age 80 and beyond.

Don’t switch off and be idle when you retire. You can still do things that are of interest to you, or you can get involved in things that are of value to your community, all at a pace you feel comfortable with.

The flipside of the coin is that you may have to keep on working very hard and under stress, till age 65, before you retire. In that case and if the actuarial studies of some of the world’s largest Corporations hold true, then the chances are that you would probably die within a few years of retirement.

In a nutshell, by putting in 10 more ‘hard’ years, after the age of 55, you could potentially forfeit 20 years of your retirement. Or saying it differently, for every year you work beyond the age of 55, on average one forfeits two years of life span.

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Alec Riddle was recognised by the industry as an authority on financial planning, when he was crowned the FPI/Personal Finance Financial Planner of the year for 2009/10, after being named a finalist in 2008. Riddle has a BA degree, majoring in Mathematics, from the University of Port Elizabeth, successfully completed his Post Graduate Diploma in Financial Planning in 2005 through the University of Free State, and became a Certified Financial Planner. In addition to being awarded SA colours in 3 sporting disciplines, he also coached numerous national champions and Olympians and qualified for the World Iron Man Champs in 2011/12 and was World Champion in his age category in 2011.

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Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.

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Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.

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Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on Entrepreneur.com.

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.

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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel

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Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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