Pivotl - Issue 4-2023

BUSINESS BEAT
imposing a Two-Pot System
would triple retirement savings in
South Africans. It is meant to
position you, although
involuntarily, to retire comfortably
and reach your retirement goal.
Strategies for adjusting your
Retirement Plan to suit your
needs in tough economic times
Be advised to not be tempted to
leave the sole responsibility of
your retirement planning in the
hands of the government or your
financial advisor. It is your
responsibility to ensure that your
planning meets your desired
income goals when you retire.
Despite the Two-Pot System,
there are voluntary measures
that you can implement to your
retirement plan in the event of
unexpected expenses or changes
in your financial circumstances.
COVID-19 has demonstrated
the need for personal financial
relief for many, followed by the
recent hikes in interest rates,
which have led to people
compromising their retirement
investment plan.
You can voluntarily opt to
reduce your monthly
contributions rather than totally
stopping your retirement
investments. However, while
reducing your retirement
investment provides a short-term
relief, it is not a good solution for
the long term. Merely reducing
your contributions for one year will
result in a reduction in your yearly
income during your retirement.
Ideally, increasing your streams
of income weighs as a better
solution for immediate and longterm
financial relief. Having a
side-hustle by monetising goods
or a particular skillset will not only
see you through tough economic
times but will ensure that your
retirement plan is not
compromised, in fact, it might
increase your monthly income
during retirement.
If a side-hustle is not yet an
option for you, an easier way
would be to discuss with your
financial advisor ways to invest in
an investment strategy that
allows you to get the best
optimum growth for your
retirement investment.
Diversifying your Retirement
Plan and protecting it against
market volatility
Revisiting your retirement plan
annually will give you the
opportunity to evaluate if your
asset allocation is still on track
during seasons that markets are
volatile.
As the saying goes: “Don’t put all
your eggs in one basket.”
Market volatility is a natural
characteristic of the market, so
this should not scare you, but
should rather motivate you to
diversify your retirement
investment by investing in
multiple asset classes. This is also
a good opportunity to learn
about your risk tolerance. What
sort of investor are you in high
tides, are you conservative,
aggressive, or in between? If
you’re having trouble sleeping at
night thinking about your
investment, then maybe consider
investing a larger portion of your
money in a less riskier asset class.
During high tides, you also get
to determine your investment
goal, are you looking for growth
or for income opportunities? It is
advisable to focus on growth in
your earlier years and then
income in your latter years.
Ultimately, committing to the
habit of reviewing your
retirement plan annually will
result to acting quicker against
threats to your retirement
investment, and acting promptly
to market opportunities that will
allow you to meet your
retirement goals sooner. n
Thato Malebo is a dedicated Financial Advisor on a mission to transform clients’
financial dreams into reality. With a focus on Wealth Protection, Creation,
Preservation, and Estate Planning, Thato employs her expertise to simplify
complex financial decisions. Building lasting and mutually beneficial
relationships with clients is her specialty, backed by a top-notch team of experts
in various financial fields. Thato follows a straightforward 5-step approach: set
goals, prioritize them, figure out what you need, create a personalized plan, and
keep it on track as life unfolds. To start your journey toward financial balance,
contact her at thatomalebo2@gmail.com or +27 79 049 0476.
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