“You ask people: ‘When do you want to retire?’ and most people say they want to be financially independent by their late 40s. Then you say to them, ‘Well okay, you are 32 now, what are you doing to become financially independent in your 40s?’ and they usually don’t have a plan.”
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Kristof adds: “I really want to advise people: Talk to someone, make a plan, work the plan.”
Kristof mentions the R350,000 annual allowance that taxpayers get if they save for retirement, and adds: “You have no excuse … that money comes back to you as a tax break.”
“Sit down with a financial adviser and look at those calculations. See how quickly a small monthly investment, reinvesting the tax break on that … what a big difference that can make.”
The 39-year-old father of three has been saving for retirement since he started working in his early twenties. When asked what he would advise young people, Kristof said: “My advice to young people would be, start saving at a very young age. Get used to it, get used to saving at least 10% of your income, putting that away.”
He says they should increase that as their income grows. “Let the 10% become 20% become 25% and, before you know it, you are in a very good position, a position where you are financially independent.”
Financial independence for Kristof would mean “work becomes a choice for you and your RAs are in a such a place where if you lost your job today or tomorrow (which isn’t too uncommon an occurrence in these turbulent times) that you would be fine”.
A consulting engineer and business owner, Kristof adds: “I regularly talk to people about saving for retirement and there is always an excuse, there is always saying one day I will do it … when you start talking to them about their quality of life they feel like they are entitled to driving a new car every four years or so.
“I say to them do you really need to drive a new car, maybe you could drive a new car every 8 years, and with some of the money that you save you can save for retirement.”
Use the 10X calculator to create your own unique savings plan
It is not just his friends that he sees making the mistake of not preparing for retirement, he has seen a number of family members getting to retirement age and “not having anything or having provided for their old age”. He hates to see “the unnecessary stress that brings into their lives”.
On the subject of avoiding unnecessary stress, Kristof says he really enjoys the ease of accessing information about his investments with 10X.
“It takes me about 10 seconds to log in and I can check how my fund has performed and I can make changes easily. It’s been quite easy working with 10X compared with the more traditional RA funds that I have worked with in the past.”
This convenience is an added bonus to the big fee saving Kristof made by moving his savings to 10X. He says that in these increasingly tough times people are being forced to consider the damage high fees are wreaking on their retirement savings.
‘“I think the days of seeing massive double-digit growth are long gone. To invest your monies and still see a decent enough growth that you can retire comfortably one has to look at the huge impact of paying fees that are 2% lower.”
The views expressed in this interview are Kristof's opinion, based on his personal experience, and should not be construed as financial or tax advice. Kristof du Plessis was not paid for this interview although 10X compensated him for time spent and expenses incurred on the day.