16 January 2015
What should you save for first? Your children’s education and then retirement? Or vice versa? In the view of Danelle van Heerde, head of advice processes at Sanlam Personal Finance, one financial priority should always take precedence – saving for retirement.
“Many people delay starting to save for retirement, believing it is more important to put away money for their children’s education first. They think they will be able to catch up on retirement savings later, once their children have started working. Some people even believe that, with a good education, their children will be able to look after them in their old age,” Van Heerde says.
But in her view, retirement comes first – and here’s why:
“Saving for the future means making choices and creating a balance between competing financial demands,” says Van Heerde. “Retirement savings always come first, and if you have money to spare after this, you can put some away for your children’s education. A professional financial adviser will be able to work out how much you will need in retirement, and structure an investment plan accordingly,” she concludes.