Retirement is a tightrope - here's how to walk it without falling
With a structured plan, flexible spending, and trusted advice, you can balance enjoying life without outliving your savings.
Retirement Planning, Personal Finance, 123rf.com
CapeTalk’s Sara-Jayne Makwala King is joined by Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments.
Listen to their conversation in the audio clip below.
Retirement can feel like walking a financial tightrope, trying to balance the fear of running out of money with the regret of not enjoying what you’ve worked hard for.
"...picture a high wire artist ...on the left is a gust of wind... sort of outliving your money...and on the right is another gust of wind, effectively living too small. So, sort of as a retiree, you have to sort of cross this tightrope with a balancing rope. Ultimately, a structured spending plan is the key...a market crash, sort of the current sort of geopolitical landscape, or even a medical bill, ultimately feels like a disaster."
- Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments
Phillips explains that research shows that 40% of retirees fear running out of money, and more than a third underspend despite surplus assets.
"...it's really the same rope, but a different wobble."
- Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments
He adds it’s often due to psychology and habit.
"For 40 years, you’ve had a paycheck coming in. That first big withdrawal in retirement can feel like failure."
- Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments
Phillips says longer life spans and rising costs make planning even more essential.
“Cash feels safe, but inflation is a thief.”
- Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments
He recommends flexible, inflation-adjusted withdrawal strategies and regular check-ins with a financial advisor.
"...retirement isn't the end of financial planning, it's the start of a new skill. So sort of turning savings into purposeful income...if you work with a sort of trusted advisor, and you actually can sort of add that connection relationship, you will be able to sort of update that and ultimately, on sort of the tightrope, enjoy the view."
- Mark Phillips, Head of Portfolio Management & Analytics at PPS Investments
Scroll up to listen to the full conversation