Holistic retirement planning: how much is enough?

In retirement planning, it's crucial to focus on factors you can control: timing, risk, and the amount you save.

- Jaco Fouché

In previous articles, we discussed timing and risk. Now, let's focus on saving and determining how much you need to secure your financial future.

Failing to calculate how much you need for retirement and how much to save puts you at significant risk. Without a clear savings target, you may run out of money, especially as life expectancy increases and health care costs rise.

This could lead to over-reliance on family or government support, straining relationships and reducing independence.

How much should you save?

The amount you need to save for retirement depends on four key steps. These steps are interconnected and essential for ensuring a secure financial future.

1. Determine your post-retirement budget

Start by reviewing your current budget and adjusting it for a retirement scenario. Some expenses, such as work-related costs, may decrease, while others, like medical and leisure expenses, may increase. Include all relevant categories:

In Living Financially Carefree, co-authored by Jaco Barnard and me, we divide expenses into several key areas to help individuals manage their finances effectively. The categories include: