You’re nearing retirement. What financial planning tools can help you secure your future?

One of the simplest ways to assess how much you're spending is to look at your checking account statements month to month. Total up your income for the month and subtract any investment contributions or transfers. Finally, adjust for the increase or decrease in your balance and the remaining amount is your spend. Repeat this exercise for 3-6 months and average your spending to understand the trend.

Something that I find helpful for your retirement planning is budgeting, and budgeting tools can help with that. Knowing where your money is going today, can help you plan for your future i.e. retirement. You can estimate your future retirement budget by adjusting your current one buy cutting debt payments (because your debt will be paid off), increasing medical aid payments (because you will likely need access to better medical care), and increasing travel and hobby expenses (because that is part of your dream retirement). Do this exercise regularly because your life changes all the time.

Any spending needs to target the best living standard. When that happens, a household moves from simple expense categorization to understanding if they spend too much or too little….Send me a note, [email protected], and I can sync readers up with resources.

Using retirement calculators is useful because you get to run estimations on how your money will grow and what your potentially needed draw down rate will be. Don't be overly optimistic with your numbers but don't put yourself in a position where you think "it's impossible" by being too pessimistic. It is important to use a retirement calculator regularly.

When using financial forecasting software, it is most important to analyze the assumptions that the software is using and if necessary adjust assumptions to accurately factor inflation, spending, investment returns, and tax rates to name a few. Once an analysis is complete, it may be necessary to review the software projections periodically updating your inputs because your results can change depending on a number of life and economic changes.

Only one I have seen that does planning with economic methods is Maxifi Planner. I use it in my classes. It is a very strong tool that planners and DIYers can use.

In my experience people over complicate retirement planning, and as someone that loves doing calculations, I tend to over complicate them too. Simple rules of thumb to help you simplify your retirement planning is: - Save 15% of your income per month from your early 20's. - Aim to have R1,000,000 for every R5,000 you need at retirement. If you want to be a little pessimistic, make it R4,000. - Aim to have 75% of your income at retirement. - Review these numbers often. Keeping things simple allows you to follow and maintain your retirement plan year to year.