There was hardly a receding hairline or a silver streak in sight as a room full of 20 and 30-somethings, the so-called sandwich generation, were given insight into avoiding making the same mistakes as their parents as they plan for their own Golden Years.
After a panel discussion that set out to demystify retirement planning the audience engaged in animated discussion on how they struggled with the conflicting responsibilities of educating themselves and their children as well as providing for ageing relatives.
The experts in attendance were united in their advice that these extra challenges made it absolutely imperative that they take action now and choose wisely instead of kicking the can further down the road when it would be extremely difficult to catch up.
10X partnered with JustMoney and Sandras Phiri, director of Startup Grind and founder of the Africa Trust Academy, to start the conversation among a generation that still has time to catch up.
The entertaining and very informative evening at Work & Co’s offices started with an interview by Phiri of two members of 10X Investments management team: Tracy Jensen, chief financial officer, and Emma Heap, head of sales. They outlined some of the basics of long-term planning, laid out a few home truths (37% of South Africans save for retirement; 6% can afford to retire … that number has been the same for the last 20 years) and bust a few myths (such as that active managers usually beat the index; the figures show that more than 80% of active managers consistently underperform the benchmark).
Some delicious new wines from Rikus Neethling’s new collection, Bizou, gin from Hope and Musgrave, and craft beer from Darling and Leopold7 helped the post-interview conversation along.
A few comments that were overheard:
“Why didn’t anyone tell us this before?”
“It is our responsibility to share what we have heard here tonight.”
“I don’t resent supporting my parents, but I don’t want my children to have to support me in my old age.”
It is clear that this generation has very specific challenges. The experts on the night made it very clear that they can still take charge and change course, even catch up entirely, but they must choose carefully … and act fast.
- Advice included: Start now even if you have to start small.
- Don’t gamble with active managers; buy the index.
- Don’t give your growth away to advisors.
- Buy a product that you understand.
- Keep an eye on fees.
- Ask questions.
In the words of Phiri, “A person who asks questions about things he doesn’t understand might look stupid for a moment; a person who doesn’t ask questions about things he doesn’t understand risks a lot worse.”
Many of those who did have some sort of retirement fund in place left promising to get 10X to have a look at what they had and what it was costing them, and do a comparison with a 10X fund. Nine out of 10 people who do a comparison discover they would do much better with 10X.
Others left determined to start saving something right away and give their money time to grow. The advice on the night was that if you have longer than five years to invest go for a low-cost, high equity, index-tracking fund. Starting sooner rather than later means you have more time to benefit from compounding, where your money does some of the work.
The animated conversation over drinks failed, however, to provide any conclusive verdict on whether the retirement gap that has existed for the last 20 years (37% save; 6% can retire) was likely to persist in 2038, or whether the children of this crowd would be left supporting their parents in retirement too. At least they have started the conversation.
