How to make your money last in retirement – Schalk Louw

You often hear stories of retirees in South Africa who battle to juggle their finances as medical expenses and day-to day living keep on increasing without access to extra funds. Add this to people who regard themselves ripe for retirement, but simply can't afford to. As Alec Hogg pointed out in our morning meeting; retirement was invented by Otto von Bismarck in 1881 and it was given to soldiers as a reward for risking their lives for the handful of years they were expected to last after their time on the battlefields. We now live much longer after retirement so there probably needs to be a redefinition of retirement as we humans are stretching our years on earth with the average lifespan testing the limits, but that is another debate. PSG Wealth's Schalk Louw believes with careful management of retirees' personal investment linked living annuities, retirees could be given a fighting chance. – Linda van Tilburg

Schalk Louw was talking to his mother who told him that growing old was not easy with increasing costs placing a heavy strain on retirement income. He says he has come across other South Africans who have had to sell their homes and move in with their children, because rising costs were outstripping their income. The mistake most people make, he says, is when things get tougher, they push up their income from their personal investment linked living annuities (ILLA). In the shorter term the effect may not seem that detrimental, but in the longer term the effect will seriously impact on your income.

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