While the state of our finances differs from person to person, there are some steps that you can take to create a comfortable retirement. Here is what you need to know.

Speak to a financial advisor

The reason some people put off planning for retirement is that it can seem overwhelming or something that many off us think we cannot afford at the current moment. But the truth is, there is no better time than now. If you are currently able to afford a monthly subscription to DSTV, then planning for retirement is just as affordable.

Speaking to a financial advisor can help you find out what retirement plan will work for you and your finances without putting a strain on your budget. It can also reveal areas you can cut back on to get the most out of your finances.

Having an emergency fund is important 

Having an emergency fund, if you don’t already have one, is crucial. We all want to be financially protected from unforeseen circumstances without having to dip into our savings or cut back on important policies such as life insurance and retirement plans.

An emergency fund comes in handy when you hit those financial bumps such as losing a job, or unexpected medical and car bills. Of course, putting away an amount you can comfortably afford every month is crucial. An emergency account should work with your budget and not put an additional strain on it. Whenever you are able to increase the amount, do so.

Manage your debt new so you don’t have to worry later

Debt management plays an important role in many South Africans budgets. According to the National Credit Regulator, 84% of South Africans that earn R15,000 have some form of debt. The last thing anyone wants is having to use the money they have been saving towards their retirement to take care of debt.

Keep in mind that you want your retirement savings to take care of you as long as you are alive and any debt can reduce the number of years that your money will be available to provide for you. Set a realistic goal of how much you will be able to afford to ensure that your debt is considerably reduced or finished by the time you enter retirement.

Have a retirement goal in mind 

Speaking to a financial advisor can help you set realistic goals for your vision of retirement. Having a goal in place in terms of where you will live, the daily cost of living, medical bills and transport costs. If you are planning on owning a car, you will need to fit into this retirement goal. Once you know this you will have an estimate on how much you will need to cover without falling short.

Start investing or diversifying your investments

Being able to create multiple streams of income doesn’t hurt. However, it is important to be careful what you invest in. The last thing you want is having your finger in too many pies that could result in you losing more money than you make. Always assess your situation at the end of each year to see which portfolio is working for you and which one needs to be re-evaluated so that you make the most out of it.