The relationship between husband and wife is one of the most important relationships that you will ever have. In her book “Passages” Gail Sheehy likens this significant relationship to that of a diamond. I would like to try and describe this diamond to all Boomers so that you can attempt to plot what the diamond in your life looks like.

The beginning of a marriage is a dream come true for most couples. The picture may be one of sunshine, roses and dreams of how we will live our life together. The honeymoon can last long beyond the holiday. The Bible tells us that we become “one flesh”. It is easy for us to communicate and openly share our thoughts and feelings about life, challenges and dreams with each other during this stage. This is the point at which we begin to draw our diamond, very much at one starting point, together.

Then, life starts to happen around us. We will most likely both be building our prospective careers. The decision to have children will be on the radar. Then, your first child is born - one of the greatest blessings that any couple experience together. Once the joy and wonder of this little miracle have passed, reality hits us. We chase life, career, goals, friendships and our general pace of life is fast and busy during this stage. Other children follow. Career decisions and climbing the corporate ladder challenge and excite the journey. At times it may start to feel as if we are passing one another like ships in the night and never get the time to communicate. This is when each partner begins to draw the opposite sides of the diamond shape.

This stage continues for as long as our children are at home. How long this stage lasts is dependent upon how many children you have and the age difference between them. On average though, it is a period of between 20 and 25 years. Life is filled with family holidays, various school events and playing the happy couple in the corporate world. Your most important relationship however, is often put on hold due to stress and busy-ness. It is critical to make special time for the two of you to communicate and grow together during this stage. We need to make time for “date nights” and weekends away without children, friends and family. The woman wants to feel loved and cherished and the man needs to know that he is still the most important person in his partner’s life. At this point, the opposite sides of your diamond will be at the widest distance apart, unless you have continued to communicate strongly with each other and have regular time together.

The beginning of the Third Age in your life is when the children leave home. There are a lot of complex emotions going on in the minds of any couple at this stage, the most common being the “empty nest” syndrome. This is most likely to affect women who may not have re-entered the marketplace after the birth of her children. The man may be in high adrenaline mode and successful in the corporate world. The other side of the coin also can also present itself at this stage. The man may be retrenched or feel that there is no joy in the drudge of work on a daily basis. It is very common for couples at this point to battle to re-engage and discuss who they are and what they need. Most individuals need to spend time alone and then together to try and work out what all this means for the future. Sadly, at this stage, many feel it is time to part as they don’t seem to have anything left in common. This is the most important part of how the diamond will regain its shape. We all have choices and can make a concerted effort to try and communicate, work out the issues and learn to fall back in love with this person you have been sharing a house and life with for the past 25 years.

The Third Age should be one of the greatest stages of your life. You are with a person who shares a history and children with you. The responsibility of parenting is over. You now have the opportunity to spend quality time together with less financial strain. You have your best friend at your side and you can travel and experience new and exciting things together. This part of the diamond moving back to a point can be fun as you discuss your dreams and challenges. I hear many complain that these conversations don’t happen. The men want to withdraw from life, women want a new career, and there is no common ground. I want to challenge you that it is worth fighting for. Please spend the time trying to find that love and recommitting your life to one another. We are a generation that has had more divorce than any other generation. It must be so sad to part at this stage and not work at rediscovering the wonder and mystery of the person who wears your ring.

I hope that this article will stimulate conversation for you as a couple and that you will value the diamond in your life. May you have a long and interesting journey back to the point of your diamond.

As I celebrated my 50th birthday, I realised that I was entering a new season of my life and that there were some important decisions I needed to make. The most important was, where do I want to live? I realised that I had opportunities available to me, that I did not have before.

• My children have both married and are living outside of South Africa.
• I manage my own business and spend the bulk of my time working from home in Johannesburg.
• I was starting to feel fearful about taking early morning and afternoon walks.
• and the traffic (as we all know) can be a nightmare.

I started to consider what choices I could make and a full year ago, I took the opportunity of moving to Hartebeespoort Dam. I have loved the changes that this decision has brought about in my life. I would like to share some of the research and choices that may be on your radar screen as you make these decisions. You may be surprised at the options open to you.

This document starts off by asking 7 of the most important questions we should all be asking ourselves as we’re nearing, or are in retirement. The remainder of the document provides you with tools to get some of the answers you are looking for.

Those important questions to ask …?

1. What actuarial calculations has someone else done for me …if so … what return is required on my assets to finance my future pension?
2. If I was brutally honest with myself … what level of pension can my assets sustain in the future?
3. How robust is my investment strategy against market forces?
4. Have I realistically considered external factors that can drastically impact my assets?
5. What certainty do I have that my assets will sustain my expected standard of living?
6. What quality advice have I received to date … what have I missed out on?
7. Have I really considered probability … or have I generally been sold …?

Ok let’s look at questions 1 – 3 and find some solutions to those questions.

Leading up to retirement …

The important considerations leading up to retirement are:

• How much capital do I need at retirement?
• How much do I need to save leading up to retirement?
• When can I afford to retire?
• What level pension can I draw down?

Table 1 below allows for all these considerations and provides some scenarios that could be used for your retirement planning. We will look at two examples.

Required rate of real return …

“Relevant Replacement Ratio” means the size of pension the year at retirement divided by the size of salary the year at retirement. This ratio is normally less than 100% because people in retirement generally require less income than when they were working.

Example A …

If you are 5 years from retirement with a current salary of R600 000 pa, a current pension fund value of R10m, you save 10.8% of your salary on a yearly basis, and you require a pension equal to 70% of your salary at retirement then you need a return of CPI + 1.5% on your assets and future contributions in order to finance this pension.

Example B …

If you are 5 years from retirement with a current salary of R480 000 pa, a current pension fund value of R5m, you save 10.8% of your salary on a yearly basis, and you require a pension equal to 75% of your salary at retirement then you need a return of CPI + 4% on your assets and future contributions in order to finance this pension.

The same can be done for all of the other scenarios. The table gives you an idea of what level of return you should be targeting over the long term.

Once you know the required real return you should be targeting, the next question is what asset allocation strategy you should follow in order to achieve that required real return.

 After retirement …

One of the biggest risks any investor faces is running out of money in retirement. However this should not make us fear the future, but rather plan diligently in order to enjoy your retirement years properly.

Too often investors misjudge their life expectancy. The table below illustrates the generally accepted life expectancy of a large group of individuals.

The bottom line … prepare for many years to come and make sure that your assets outlive you!

The size of the pension you draw down is a very important decision to make. Let’s work on R1m and view the impact of different levels of drawdown. Note that the drawdown is the size of the pension in the first year. Thereafter it increases at the rate of inflation.

Scenario 1:

Scenario 2:

Scenario 3:

If you decide to withdraw 10% of your capital in the first year (which will increase by the inflation rate thereafter) and you invest only in equities then there is only a 34.5% chance that your assets will outlive you for 30 years. At the same time you may only have assets for 8.8 years to finance your income. However if you only drawdown 5% and you invest in a balanced 50% equities and 50% bonds then you have a 81.8% chance that you will have sufficient assets to finance your pension.

The bottom line … it is better to drawdown only 5% of the assets as a pension as opposed to 10%.

From Scenario 1 above it is also clear that if you withdraw a large amount on an annual basis you are “forced” to take on more risk on your portfolio. This increased level of risk can work against you if the equity market falls. The result of this is that the R1m may only finance 8.8 years’ of pension drawdown.

Scenario 3 shows that if you withdraw a lower amount you can take on more risk “by choice” (by investing 100% in equities) and as a result you may have R1.8m available to your estate after 30 years. Note that this amount is in today’s monetary terms.

The bottom line … if you drawdown less then you are able to take on more risk and as a result have a larger capital balance available in future years.

Conclusion …

By ensuring that you follow a structured process you can increase the certainty of receiving the pension income that you want to draw down during retirement.

We trust you found this “15 minute retirement plan” helpful …!!

Seed Investment Consultants

www.seedinvestments.co.za

To build bridges in South Africa. For all South Africans

This is a dream bigger than any one of us , yet I know that it is a dream I share with many. How do we ensure that the see dreams become reality? How do we build a people and a nation that we can all feel proud of? Is this even possible?

I live my life with the glass half full, so I will do whatever I can to hold onto the view that this dream IS indeed possible.

As a fifty-something South African woman, I am constantly asking myself what it is that I do to help bring a small piece of this vision to pass . In the work I do at Refirement Network, helping the next generation to understand the road they are heading towards as they approach formal retirement, I often come across two very conflicting situations. On the one hand , the businesses all over South Africa are experiencing a skills shortage that is hindering our ability to make things happen. Yet on the other hand, I speak to many people who have skills but are unable to find anyone who wants to employ them. The solution seems only too clear – to build bridges!

As Marc Freedman states in his enlightening book entitled, Encore - Finding work that matters in the second half of life:

“Now a new combination of forces is impelling change. The necessity today is to encourage people to continue to work in ways that truly use their talents to support the economy as well as themselves. It is essential that those who have a strong need and desire to work in this new way have every chance to realize that objective and every opportunity to use their accumulated human and social capital in areas where it matters most.

In this context, a nascent but growing collection of innovative organizations, individual entrepreneurs and other leading-edge groups is stepping forward to change the landscape, demonstrating the potential of the Encore career.”

So how can we build these bridges?

Individual

• Understand your value and worth
• Learn to love all South Africans
• Discover your skills
• Have places where you can use these skills
• Help sustain your home and community by your actions

Companies

• Value your human capital
• Do a wisdom and skills audit
• Build capacity so that your older workers see a future beyond formal work
• Use your CSI funding to help build models for change
• Ask yourself what skills and capacity your organi sation can offer the country

Churches/Non Profit Sector

• Work together
• Remember that we all have the same vision but we need to find one wide, strong road to change
• Value the skills in your team
• Be innovative
• Embrace change and technology

Academia

• Work towards a collective vision
• Share research
• Integrate and assist models of change
• Open the doors of learning for renewing skills for older students
• Network and challenge government and business for change

Government

• Build bridges to allow for skills to be used
• Help people move beyond the past
• Build one united nation
• Change policies that hinder development
• Protect our children, elderly and the poor
• Eliminate crime
• Help individuals and organisations to focus on education, health and business sectors

Global

• Build a united nation that can stand proud in the world of the 21 st century
• Invite and assist those that have finance and skills to help us
• Become a nation that cares about our children, elderly and poverty stricken
• Build bridges to help the rest of Africa.

This is a big vision, and it will take many people, organisations and finance to bring about this kind of change. I hope to be part of the tipping point that will help to bring this about.

I will continue to knock on doors and voice my opinion until the tide turns. I value any comments, interaction and help. This is a dream for a future for my grandchildren and yours. Join me on the road to this future.

This was taken from the Sunday Times of 30th March 2008

South Africa needs 913 000 people with scarce and critical skills to fill available positions according to the Department of Labour. Nearly half of them – 102 670 crop farmers, 150 000 mixed crop and livestock farmers and 220 000 crop and livestock farm workers – are needed to secure the nation’s food supply.

The remaining demand covers the gamut of employment opportunities in any functioning economy and includes:

• School Principals 350
• Amusement, Fitness and Sports Centre Managers - 180
• Journalists and Editors – 30
• Financial Investment Managers – 1200
• Architects and Landscape Architects 550
• Engineers, all categories – 10 365
• School Teachers – 41 120
• Pharmacists – 10 200
• Motor Mechanics – 2865
• Bricklayers and Stonemasons – 1700
• Handymen – 19 000

Summit TV speaks to Lynda Smith from the “Refirement” Network about the socially useful and exciting things the baby boomer generation is going to be doing in the retirement years they’re now rapidly approaching

GIULIETTA TALEVI: Welcome to New Retirement Thinking. This is the second in our “now you’ve retired” focus. In the Summit TV studio is retirement coach Lynda Smith who runs a company called the Refirement Network. Lynda, the baby boomer generation is rapidly approaching retirement - but this generation is very different to their parents, and I imagine this is going to change what it means to be retired as a result - is that where your company comes in?

LYNDA SMITH: Absolutely. The baby boomer generation has changed every aspect and every life stage as they’ve moved through it - and we have no doubt they’re going to change this one as they head towards it as well.

GIULIETTA TALEVI: What are the principal challenges this generation faces as retirees?

LYNDA SMITH: I think the main difference that’s going to be very different from their parents is that technology and medical science has changed so much that the length of time they’re going to be in retirement will be much longer than previous generations.

GIULIETTA TALEVI: How do they cope with that? If you’ve retired 30 to 40 years ago you’ve got to have something to do with your time…

LYNDA SMITH: Absolutely. Bowls and golf are not going to make it for 30 or 40 years - you’re going to be extremely bored and depressed - and more than that on the money side that won’t last 30 or 40 years. So no matter how much you were good at putting away the money that could also be a challenge in the future.

GIULIETTA TALEVI: Last week on New Retirement Thinking we talked about how to plan for your retirement - but I would imagine there has to be a shift in terms of what your financial planner needs to be looking at before you retire in order to help cope with the fact that you will presumably be in retirement a lot longer than your parents were….

LYNDA SMITH: The shift I think to life planning and wealth planning definitely need to run parallel, and are as important as one another - because you can have all the money in the world and still be depressed. Then it won’t help. Life planning and finding the things that will make you happy and bring out things for the people around you - where you can make a difference and leave a legacy - those are the things that will become very important because of the time limit on your hands.

GIULIETTA TALEVI: You describe yourself as a retirement coach - what would a typical session or a conference with you entail?

LYNDA SMITH: Basically what we try to look at is first to try and identify that specific person’s profile. We have two online profiling tools that can be used for the 15 success factors - which look more at the internal factors of that person. The other one is a life options profile that looks at the options that are available. Literally you’ve got to work with the person to understand what they’re passionate about, what their interests are, where their hobbies lie, what skills they have - and then to try and unlock things that may be buried from when they were children. They may have been in a career with responsibilities - but maybe not doing something they love. Now they have the opportunity to have a second career.

GIULIETTA TALEVI: I’d imagine that’s quite difficult for a lot of people who spent their entire working lives doing one thing. They might have had a hobby when they were 20 but they’re retiring at 60 or 65 and that’s long gone - how do they dig into themselves and into their past and find what they might like to do with their retirement years?

LYNDA SMITH: You need to ask them questions and try and discover what the things are that they may be passionate about, what do they like reading about? In some cases they have to rediscover what those things are because they’ve buried them so deep. In the sessions where you chat to them you’re able to help them to unlock that. Again this is like anything that’s psychologically embedded in you - only you can decide that. I can only help to unlock those questions. Basically there are books and programmes that we use - and worksheets. We run courses and we run conferences. I’m also running cafes where we sit and chat through some of the trends and the questions - that in itself and sitting with a group of other people makes them identify that they’re not alone.

GIULIETTA TALEVI: Do you think that’s an issue? I’d imagine it’s quite a difficult thing for a person to rediscover in themselves what they might want to do with the next few years of their lives…

LYNDA SMITH: Absolutely, and especially for a lot of people who have been in one career for 40 years in a very structured environment. They may have fantastic skills, but the structure of their environment actually aided them to be successful - and they feel like they can’t do that without the structure around them. So it’s identifying new ways of doing things without that structure as well - and being resilient. Resilience is going to be a huge necessary skill in the future.

GIULIETTA TALEVI: You talked about skills. I think that’s an important aspect, and especially in a country like South Africa where skilled people have to retire having hit a certain age - but they’ve got skills the country needs. How do you bring those skills back into the workplace as a retiree - how do you develop a structure around bringing those skills back to the community?

LYNDA SMITH: I think for me the name of my company being Refirement Network is just that - for me it’s important to get people to “refire” and identify what their skills and their passions are. As you’ve said in a country like South Africa we really need the skills at this time - there is a national skills shortage and there's a global skills shortage. Engineers of 75 at this stage are being brought back, and they don’t have to come back into the pressure of the work that they had in their previous career - but being able to impart those skills to young engineers as mentors. Mentoring is a huge opportunity for people who have skills in accounting and in mathematics - maybe even to go back and be a teacher in a classroom. Maybe you were in IBM as an engineer and have science as a background - to go and teach the applications of that in a classroom for a few hours a week could make a huge difference in the education sector.

GIULIETTA TALEVI: Are you involved in mentoring programmes - are there mentoring programmes out there?

LYNDA SMITH: Yes, I am involved with some. I’m trying to build an association of networks around me of companies looking for skills, companies doing mentoring, and non-profit organisations and community development operations looking for those skills. You may have the money and not need the income - but you certainly need a reason to get up in the morning.

GIULIETTA TALEVI: What about people who might not have the money? They either have skills they’ve developed - or they’d like to develop a skill that can see them part-time through the rest of their retirement - what is your advice to those people?

LYNDA SMITH: I think there’s two. Many become entrepreneurs using those skills - and building their own business - so there's again a lot of opportunities and networks around helping 50 plus entrepreneurs start up new businesses. That’s the one side. The other is the skills database I have - so as people knock on my door and connect with me asking for specific skills I’m able to connect them with people out there who have those skills. There’s going to be a lot of people who are going to have to continue to work and earn an income to sustain them into the future.

GIULIETTA TALEVI: Absolutely. What is the website people can visit for the company that you run?

LYNDA SMITH: That’s www.refirementnetwork.com

Since starting in the recruitment field 8 years ago, I find myself steering conversations to my favourite topic – careers. I love learning about people’s working experience, and I want to know the whole story, from school, all the way to today. I don’t think I’ve ever heard someone tell me that they received good career guidance at school. I know I didn’t. I clearly recall completing an interests test at school. My results said I should be a genetic scientist. I didn’t pursue that suggestion, instead I decided to follow my childhood dream of being a maths professor. I am very relieved that it didn’t work out for me, but it took me a long time to get to where I am now – qualified in HR, running a recruitment business and best of all, preparing young adults for the working world.

In February 2007, I launched CareerBuild, a mentorship programme that empowers CareerBuilders (young adults between the ages of 17 and 25) to plan and choose their careers based on a knowledge of their God-given abilities, talents and purpose, as well as an understanding of the employment and studying opportunities in our country. So far approximately 90 CareerBuilders have completed the programme and we’ve seen some remarkable progress, mature decisions and a sense of purpose amongst our CareerBuilders.

We have run 4 programmes in Alex, and 2 in Braamfontein. Our CareerBuilders have included 5 ex-street children, a number of HIV positive youth, parolees, 2 SRC presidents, the president of the ANC youth league for Alex and lots of young adults hungry for opportunities.

However, at a rate of 90 CareerBuilders a year, I am not even scratching the surface so I have assembled a small team of likeminded, passionate individuals and we have changed our mentorship programme into a 10 week programme aimed at Grade 11s. We are piloting the new programme at Kwabhekilanga High School in Alex in July this year.

One of our major challenges is, that by removing the mentors from the picture, we are removing a networking point for the CareerBuilders. You can see from the success stories, that one of the main strengths of CareerBuild has been the fact that the mentors have used their contacts to assist CareerBuilders to gain access to the workplace to find out about the careers they are planning to follow as well as to find employment.

So what is your part to play? We are currently partnering with Lynda Smith to establish a database of experts in as many industries and fields as possible. We would like experts who are willing to give the CareerBuilders advice by phone or by email, or to provide tours of their workplace and even vacation work. As CareerBuild expands there will also be opportunities to recruit learners, apprentices and entry level staff from CareerBuild.

If you are interested in offering your assistance to help build a better South Africa by contributing to the future of our youth, please email me on carole@watershedconsulting.co.za or by registering on Lynda’s website.

Busi has had a tough childhood, but she doesn’t like to dwell on her past – instead she is looking forward to a bright future. She is an orphan who heads up her home. In spite of her hardships she was the top student at her high school. She wrote matric in 2007, and managed to achieve an A for English. Her dream is to run a risk desk at one of the merchant banks so she decided to rewrite maths and some other subjects this year. She passed with a university exemption but her marks are not high enough for the degree she wants to study. We hooked her up with Colleen Larson, the CEO of Women in Finance, so Busi is working with one of the most influential women in banking in 2008.

Rebotile has completed matric and a Certificate in Office Management. She was working at Mr Price when she attended CareerBuild. We used our network to find her a contract position as a receptionist. When the contract was finished, Rebotile used her new job seeking skills and experience to find herself employment in a call centre that offers good training.. The shifts are hard, but she is scoring well in the tests and she is also saving so that she can pay for her studies next year.