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Reaching Retirement with Enough Capital

Longevity or poor health can impact retirement.

Brian Tracy




It’s common knowledge that very few people reach retirement age with sufficient capital saved to maintain their pre-retirement lifestyle. There are several reasons for this shortfall including insufficient reserves, decreasing returns on investments and an increase in longevity. All three factors combine to restrict the income earning ability of seniors after retirement.


The longer you live, the more capital you will need to fund a retirement income. Currently statistics reveal that the life expectancy of an average male and female aged 65 respectively is 19 years and 22 years; a lot longer than we have been led to believe.

Our life expectancy reduces as we grow older but will never reduce to zero and, the average 85 year old has a life expectancy of seven years.

The more information known about the individual, the more accurate the life expectancy calculation will be. The lifestyle and medical situation of a retiree plays a significant role. Thus, a 65 year old male who:

  • Smokes, earns R5 000 a month, works as a cashier and has mild medical conditions has a life expectancy of 11 years.
  • Has never smoked, earns R50 000 a month, works as an accountant and has not been diagnosed with any medical conditions has a life expectancy of 23 years.

Many people forget that this expectancy is the average, which means that both 65 year olds have a 50% chance of living beyond their life expectancy.

It is therefore critical that your financial adviser takes these longevity factors into account when projecting your retirement capital and income requirements. If life expectancy is not included in the calculation, you cannot determine what income needs to be sustained for the rest of your life.

To forecast an accurate life expectancy is difficult.  All insurers – other than Paramount Life – only look at age and gender when determining life expectancy.


In the table alongside I’ve tabulated a few retirement scenarios to determine the effect of different escalations and how this affects retirement capital.

For a 65 year old (healthy male, accountant, earning R50 000 per month, non-smoker) who wishes to start with an income of R10 000 per month, the capital required will vary according to his income escalation expectation.

It’s worth noting the extra capital required to give you an increasing income. Always be aware that the capital required increases exponentially as your income escalations increase. This has significant implications if you are 65 and have to pay a retirement village levy of R2 000 pm.

Considering most retirement village units are priced around R1 million, it’s essential to factor in that a 65 year old retiree will need to invest as much as 60% of the purchase price just to cover the levy. The only way to reduce this cost, and remove risk, is to purchase a guaranteed annuity which takes into account your medical and lifestyle condition.

Investment returns

It is crucial that above inflation returns are achieved. One needs to take into account fees ranging between 1% to 2% of the return and try to target somewhere between 3% to 4% above inflation.

At retirement you currently have two options when exiting a pension fund or retirement annuity:

  • Guaranteed Annuity. These are calculated by the actuaries at a life assurer. All the risks of the ‘expected not occurring’ are for their account.
  • Living Annuity. The annuitant makes the call and all the risks of the ‘expected not occurring’ are for their account.

The importance of your personal longevity expected income escalations and expected investment returns should never be underestimated.

Whilst it’s difficult to recommend a fixed annuity at this stage, as interest rates are so low, Paramount Life certainly has the edge with their underwriting methods. Those whose life expectancy is shorter may be well advised to compare the annuity Paramount Life offers, to even a living annuity, where the member takes all the risk.

Brian Tracy is the most-listened-to audio author on personal and business success in the world. His talks and seminars on leadership, sales, managerial effectiveness and business strategy provide people with proven ideas and strategies that they can implement immediately for improved results.

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Personal Finance

6 Ways To Develop A Millionaire Mindset

Chasing money has remarkably little to do with getting rich.



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If you truly want to have a million dollars, you must first be and think like a millionaire. By doing so, you will attract the necessary resources to you.

So, you want to become a millionaire entrepreneur? You’re not alone. Many dream of leaving their job and becoming their own boss, enjoying the various millionaire lifestyles we watch on TV. But there’s a difference between those who dream of becoming millionaires and those who do. And it begins and ends with mindset. If you don’t develop that mindset, you will continue to spin your wheels, working just as hard, but never going anywhere.

Developing a millionaire mindset requires you to stretch your thinking. Start by developing the following six attributes.

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Personal Finance

4 Ways To Become A Millionaire Even When You Start With Little

It costs nothing to take advantage of the limitless opportunities online.

Timothy Sykes




The hardest part of becoming successful is getting started to begin with. But despite the challenges ahead of you, there’s a way to become a millionaire when starting with little. I’m going to show you four reasons why you can become a millionaire with just a small investment.

1. First focus on learning, not big gain

Education is your greatest weapon. Focus on learning in the beginning. Don’t make the mistake of focusing on making huge gains in the beginning. Learn everything you can because this is how you build the foundations for long-term gains.

Related: 21 Choices Millionaires Make That You Aren’t Making But Should Be

They say that if a millionaire goes bankrupt they’ll nearly always be able to get it back. And that’s because they might have lost their money, but they have the knowledge of how to get back to where they need to be.

2. You can learn loads about any topic online


I’m grateful for the internet. It’s the single biggest library in the world. You’re reading this article right now and you’re acquiring knowledge you wouldn’t have been able to acquire 40 years ago.

Use the internet to its fullest extent, whether that’s through reading books, browsing articles or watching video tutorials. Set some time aside every day to learn something online. It could be a video series or a favorite blog.

When you get into the habit of learning regularly you’ll find that you advance much faster.

3. Focus on the niche you love

These days you can learn about anything and target the niche you’re passionate about.

This is what I was able to do with penny stocks. I found a gap in the market and provided knowledge to people who wouldn’t have otherwise being able to access this sort of information.

You can do that with absolutely any niche. When you find a niche you’re passionate about and you use the reach of the Internet you start to make huge gains.

4. Prove your expertise by creating free content

Your reputation as an authority is the new business card. There’s a reason I created a penny stock guide and made it free for all. You may have already seen ads for it on social media. The way to succeed with little is to create a reputation through your content.

Related: How To Become A Millionaire, Explained In 1 Minute

It’s the gateway to success because through free content you start to build relationships with others who value your work. And from there everyone gets richer.

You can do lots with a little

The days when you needed a huge investment to become successful are long gone. These days you can do so much with just a little. Find what you love, advance your knowledge in that area, and create a product that fulfills a need. Finally, work on building up relationships through portraying yourself as an authority on your subject.

Combine everything together and you can accomplish anything.

This article was originally posted here on

Related: 13 Habits Of Self-Made Millionaires You Could Adopt Today

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Personal Finance

10 Tips To Become A Millionaire This Year

Becoming a millionaire requires changing your mindset and implementing some changes.

Murray Newlands



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Becoming a millionaire may seem out of your reach, but it’s possible with the right attitude and guidance. The fact of the matter is your income can only grow as quickly as you do, so you need to change your mindset to achieve your goal of becoming a millionaire.

Once you have a millionaire mind, you can’t lose it, no matter what financial or business mistakes you make along the way. To get yourself there, you’re going to need some structure. To help you, I’ve outlined the top ten tips you should follow to become a millionaire this year.

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