I had the privilege of sitting down with two young professionals in Lesotho who are doing amazing work within the financial planning space in Lesotho. In part 1 of the blogpost, we discussed the importance of financial planning and the building blocks of a financial plan.
In part 2 of the blogpost, I continue my conversation with Lerato Sekantsi (LS), the founder and managing director of Strategic Wealth Managers – an investment advisory and financial planning firm. Lesaoana Monyane (LM) who is an aspirant financial corporate and personal financial advisor, who is currently engaged as a Principal Officer at Pulamaliboho Financial Services also joins the conversation.
How to plan and save for retirement?
TKay: In the last blogpost, we mentioned that the best time to start saving for retirement is yesterday. Often times we encourage people to start early, but hardly ever talk about how they can go about this. So, if someone is reading this and thinking “I want to start saving for my retirement”, where do they start? Which products should he/she think about? There are many options to consider for example provident funds, pension funds and annuities. Where do I start?
LM: Well, seek a financial advisor to help you develop a plan. There are many aspects to look into to determine how much you will need in retirement. You need to know how to structure your retirement so you can determine the retirement income you will need.
TKay: There are also people who are self-employed who are also thinking “I want to start saving for my retirement” or people who are business owners and have employees. What are some of the things they should be thinking about in terms of retirement planning?
LS: You’ve touched on provident and pension funds. Some of these funds are employer based funds. It means by virtue of being employed by a certain employer who already has these funds in place, you become a member simply by being employed. But as an individual, you can get a retirement annuity, which are voluntary funds where you can seek advice from a financial advisor who would advise you on the right investment vehicles to build up your retirement portfolio. You can do this via a retirement annuity fund for employers who don’t have that in place. Employers can also do their own private funds, register it locally and get it exempt so that they are not liable for paying both the severance pay and pay for the retirement fund contributions as well.
LM: To add on to that, you can have your own retirement savings, because sometimes the employer contribution and your contribution may not be sufficient. So you need to know how much you will need, so that you can determine if it will be sufficient. It’s very important to know how much you will need and how much contribution you have to make in order to have the sufficient capital you need.
If you are wondering what your financial plans look like or where you are in terms of your retirement planning, I encourage you to speak to a qualified financial planner or financial advisor or consult with a financial coach.
