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Retirement Planning
Monday, September 22, 2014 - 02:16
Taking control

According to the South African Reserve Bank, total savings to retirement funds, annuities and group pension funds amounted to approximately 16% of a household's disposable income in 2012, which added up to a total of R311 billion - placing South Africa among the top 15 of the world's pension industry ranks. Despite this, only about 10% of South Africans are able to retire without financial assistance.
Steven Nathan, Chief Executive of 10X Investments, says that part of the reason for this situation is the retirement industry itself, which often follows practices that are not optimal in helping South Africans achieve their retirement savings goals.
"There are a number of challenges that investors face when trying to plan for their retirement." He adds that some of the challenges investors face include: too much choice, complexity of products, high investment fees, a lack of transparency, as well as not understanding the difference between active and passive fund management. "Together, these factors can have a detrimental effect on an investor's retirement returns."
In an effort to counter this, 10X has launched an online Retirement Planning Guide to help people to take greater control of their retirement savings and create a sensible and realistic retirement plan. Developed in partnership with Cognician, an online coaching company, the guide takes users on an interactive journey and helps them build for a prosperous future by guiding them to ensure the right actions are taken.
"While there are many online retirement calculators available, they often do not help investors navigate the complexities and pitfalls within the retirement industry," says Nathan. People are simply not saving enough as a result of making a number of saving mistakes, such as: starting to save too late, saving too little and not preserving their savings when changing jobs."
He says that the second issue is that even if investors are saving diligently, the retirement industry's practices may prevent them from earning an optimal return on their savings. "These mistakes include: bad fund choices, under-performing fund managers and paying punitively high fees."
The Retirement Planning Guide modules explain the need to define a retirement goal, the importance of making the right choices based on logic rather than emotions or biases, the benefits of compounding savings and returns over decades, why investors need to take action sooner rather than later and how they can monitor their retirement savings progress.
He adds that many investors often do not realise that there are simple steps that they can take to ensure that they are able to comfortably retire. "As a user goes through the various modules, each of these steps helps to ensure that investors have a full understanding of actions that they can take to achieve their retirement goals."
The interactive retirement planning program can be accessed at: www.10x.co.za> and look for “Retirement Guide” near the lower right.
The service contains four 30-minute coaching guides ("cogs"). "By combining 4 books, 4 videos, 9 content links, 12 articles, and over 20 summary quotes, the Retirement Planning Guide brings together everything an investor should need to know to retire on their own terms."

Copyright © Insurance Times and Investments® Vol:27.9 1st September, 2014
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