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It's My Money with Suzean Haumann · Strictly Business

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  You're listening to Strictly Business Podcast with Lindsay Williams.
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  This edition of It's My Money is brought to you by Brenthurst Wealth, your partner
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  for global wealth creation.
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  Welcome to It's My Money.
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  It's My Money is brought to you by Brenthurst Wealth, South Africa's
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  multi-award winning boutique wealth manager.
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  With me today is Suzanne Howman from Brenthurst Wealth, of course, and we're
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  going to talk about retirement.
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  Now, some people, Suzanne, are going to be lucky enough this time next year not to
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  retire.
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  to be working.
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  They're going to retire in 2026, which is a luxury that is not going to befall me,
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  but many people will be.
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  In fact, I know one chap and he's sort of a little bit worried about it, not from a
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  money point of view,
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  but about what he's going to do all day.
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  But the point is, there are certain people that won't be prepared for this delicious
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  event.
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  Good afternoon, Lindsay and listeners.
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  Thank you for having me and all the best for 2026.
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  Thank you.
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  Lindsay, that is very true.
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  Too many South Africans actually go into retirement without a real plan.
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  And that's not just a plan for budgeting or your investments,
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  but actually on what am I actually going to do after retirement?
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  Because let's face it, if you just sit at home, twiddling your thumbs and watching
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  the birds, you are getting old,
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  your brain will get old.
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  So you have to have a real plan.
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  Because your retirement phase for many of us could last 20, 30 or even 40 years.
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  That's a long time.
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  It is.
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  So you're giving life advice as well.
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  And that's an interesting thing that I hadn't thought we'd talk about.
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  The actual, not the science, but the art of retiring.
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  And so do you sit down with people, before we get to the financial stuff,
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  do you sit down with people and give them advice on that very subject?
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  In other words, keeping active?
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  Absolutely.
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  That is in a certain sense.
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  It is actually a very big conversation I have with my clients.
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  I had a meeting this morning with one of my clients that's retiring end of
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  September this year.
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  And I asked her, what are you going to do after retirement?
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  And I'm not referring to we are going to move to Langebaan and set up house there.
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  What are you going to do to remain active?
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  Are you going to get a contract work?
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  Are you going to give private music lessons?
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  Because she's a music teacher at a school here in Cape Town.
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  Are you going to start a small community where you guys can still play your
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  instruments?
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  And my own mom, who retired December last year, she's now outpouring for me in
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  inverted commas.
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  I told her, you retire, but you are not going to sit at home.
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  You are going to fetch my son after school, drive him to his extramural
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  activities, taking home,
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  make sure he does his homework.
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  That gives her a purpose.
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  In the morning, she does what she wants.
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  But in the afternoons,
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  she's got stuff to do on a daily basis that keeps her active and keeps her mind
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  busy.
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  Poor mum, I bet you're a tough boss.
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  Let's talk about the financial side of things.
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  Now, we have to do that.
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  And you say you've got to start with a budget and you've got to be honest about
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  yourself.
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  You can't say, right, I'm retired now.
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  I've got this pot of cash sitting there.
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  I'm going to go off on a three-month holiday in Europe or whatever it is.
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  You've got to be honest.
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  honest with yourself and live within your means, haven't you?
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  Absolutely.
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  So I always tell my clients, listen here, you've worked for 30, 40 years now.
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  So you do have the luxury of taking something for yourself and spoil yourself.
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  Looking at your means, what you've got, that little something can be a 50,000,
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  a 10,000.
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  It can be a 500,000, depending on your little piggy that you saved up until now.
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  But so many retirees spend too much too soon in retirement.
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  They go in with, I've got this big lump sum now, I have to go on a European travel
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  holiday,
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  I need to go and visit my kids in Australia, etc, etc.
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  And then they come back.
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  And now all of a sudden, their savings is a million rand less,
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  because they've taken a year and they just travel.
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  And now the reality sets in that.
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  Now I don't have enough left to actually retire.
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  It's estimated that you would need around 70%
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  of your pre-retirement income in retirement to survive and to keep your
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  standard
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  of living the same.
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  You say here in this table that you kindly sent me that if you want to have a monthly
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  gross income of 35,000,
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  which is 420,000 a year, you need just about seven and a third.
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  million capital to retire on.
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  Correct.
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  This is just a rough draft,
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  a rough estimate that if you draw down between or around 5%
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  on a 35,000 monthly income in today's values,
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  you would need roughly 7.4 million rand.
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  Look, according to a CISA standards.
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  A sustainable income drawdown levels between 4 to 6 percent.
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  Anything less than 4 percent is ideal.
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  Anything above 6 percent becomes touch and go.
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  OK, you've got to make a plan as well.
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  Now, I'm very good at plans.
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  I get a lovely sharp pencil and I sharpen it.
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  I go through the whole process.
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  I sit down, sharpen the pencil, put the piece of paper in front of me, and I draw
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  a blank.
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  Then I go off and make a cup of tea.
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  But at least I've made a start.
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  So do make a start, but make a start with Suzanne Hellman.
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  Don't make, and Brentus, don't make a start on your own because the points that
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  you make are very good.
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  How do you start with a plan if you've never planned before, Suzanne?
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  We've got five.
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  points that I always discuss with my clients.
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  You have to set yourself realistic retirement goals in your early working
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  years.
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  Set up what do you want to achieve when you retire.
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  Look, when you're 20, that might not be ideal because let's face it,
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  the average 20, 28 year old can't afford a property yet.
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  So normally around 30, 35, you're setting your career.
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  You are married now.
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  You probably have a kid or two or you are planning on having a family.
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  That gives you a better idea of what would my goals be when I retire?
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  What would my income need be?
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  So that's the first step is setting yourself retirement, realistic retirement
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  goals.
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  Then calculating how much capital would you need at retirement to actually reach
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  those goals.
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  A very important point.
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  deciding when you are going to retire.
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  Am I going to retire at 60, 65, 70, 75?
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  Make that plan, set yourself up because that is ultimately your end goal.
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  You have X amount of years to reach that goal.
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  And then planning on how long your money must last.
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  Obviously, none of us know when we are going to be leveled with earth.
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  So get yourself.
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  average age 90 95 100 we've got many clients that said listen here my mom lived
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  to 95 my dad lived to 90 it's very much that the idea is there that i can maybe
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  reach
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  100 so let's plan to 100 worst case scenario and
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  then a very important one that people often neglect is considering your estate
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  planning your medical
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  cover in retirement and then also obviously your tax
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  implications when you do take lump sums of your retirement funds etc etc and also
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  don't forget that every
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  year there's a budget and in the budget the things change so you have to keep in
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  touch with the changes via your financial planner that
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  that's that's quite an important point i think review the plan and review whatever
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  retirement plans you have suzanne
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  absolutely
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  that is why i always tell your first plan will very seldomly be perfect but that is
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  a
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  solid base to start with and you will then adapt it over time.
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  Financial planning is not a once-off event.
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  That's why we at Brentist also, we don't see clients for a once-off advice.
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  Here's your plan, go out and do it yourself.
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  We create a relationship with a client.
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  We walk the whole path with him since from a young age through planning at retirement
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  and in retirement.
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  It's a continuous plan it's a continuous adaption of the plan, making moves,
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  doing switches within your portfolio as markets change, et cetera, et cetera.
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  It's not a once-off.
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  It's a living, breathing entity.
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  Now, absolutely.
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  I've calculated that I've had 47 discussions over the years that I've been
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  speaking to Brenta's Wealth on what
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  to choose, life versus living.
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  And I'm talking about annuities now.
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  You've got to go through it again, though.
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  What do you choose?
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  There's no blanket.
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  advice for any client.
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  It is each client to his own needs and his own circumstances.
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  Where you have someone that's got no spouse, no family, no kids,
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  and they've got a certain amount of money and they don't like the volatility in the
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  markets,
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  they prefer to know that I've got an income for the rest of my life, come hell
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  or high water,
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  a life or a guaranteed annuity as we know it is the better route for you because you
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  buy your annuity,
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  you get your income with increases every year and you can rest assured that that
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  will be paid to you.
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  If you have beneficiaries or you've got some,
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  you don't want the capital to be in inverted commas lost after your death,
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  then we can look at a living annuity where you can choose your income between 2.5 and
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  17.5 percent.
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  Any remaining capital after your death can go to your beneficiaries.
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  The risk there is that you can outlive your capital if your drawdowns are too
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  high and the markets underperform
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  over a long term.
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  Then what we also like now is the.
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  Basically, the hybrid annuity, which is a combination of the two,
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  where you can combine a certain portion into a live annuity, which are guaranteed
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  a certain income.
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  And then your living annuity part, you can go a little bit more aggressive to get
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  that growth.
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  And that can then eventually that living annuity part can be left to your
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  beneficiaries at death.
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  So that's your three basic options that we always investigate.
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  We always look at for our clients.
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  And like I said, the one which is perfect for one client might not be the best
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  decision for another client.
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  But you can also blend the two, can't you, and create a hybrid apparently.
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  That's the hybrid annuity I mentioned, yes, where you can put a little portion.
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  Certain platforms allow you up to 75% into the guaranteed annuity portion.
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  Other platforms will cap you at a 50%.
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  So you can play around to see what your income will be.
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  from your hybrid annuity versus your living annuity portion.
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  We've been speaking about the things that you should do, but what about the things
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  that you shouldn't do?
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  You've spoken about a couple of them.
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  You said you mustn't withdraw too much.
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  You mustn't go and splurge because you suddenly see this figure flashing on your
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  bank statement or your retirement plan
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  statement.
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  But avoiding risk is quite a good one.
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  You think to yourself, right, I've retired now.
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  I haven't got the income I used to have.
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  I've only got a portion of it.
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  So I've got to withdraw into my investment shell.
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  And I can't have a look at AI stocks and things like that or funds that concentrate
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  on growth stocks.
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  That's the wrong approach from my point of view, Suzanne.
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  A hundred percent.
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  Also a conversation I have with many clients is we all plan for retirement.
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  But what about after retirement?
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  You just don't take your money at retirement and go and put everything into
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  a money market.
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  You still plan for 20, 30, maybe 40 years ahead.
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  So you can't take...
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  all risk off the table.
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  You will have to take some risk within your investments to ensure that your
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  capital growth is
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  equal and more to at least the bare minimum inflation.
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  You have to outperform inflation over a period to make sure your income
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  stays valid.
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  Okay, good.
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  Great advice as always, Suzanne.
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  Now we're going to end on the note that has come through.
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  Throughout our conversation, don't leave your future to chance.
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  You say, take control, start 2026 with a retirement plan you can trust and also
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  start it with talking to a
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  financial advisor like yourself.
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  Suzanne, thank you very much for your time.
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  Suzanne Hellman is from Brenthurst Wealth.
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  And that was It's My Money.
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  It's My Money was brought to you by Brenthurst Wealth, an award-winning
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  boutique wealth management company.