The 3 retirement myths

Myth 1: When I retire, I’ll only live for another 10 to 15 years

Many people underestimate how long they’ll live - thinking that by the time they retire, the majority of their life is over.

However, looking at the table below, this is clearly not true! With life expectancy on the increase and people retiring earlier, most people are living up to at least one-third of their life again in retirement!

How long will you live?
The table below shows your average life expectancy from birth:

How can you make your money last?
	Build 3 pools of wealth®. Make sure you have the right investment strategy so your investments continue to provide for a comfortable lifestyle in retirement.
	Adequate wealth protection insurance will ensure your wealth, lifestyle and loved ones are taken care of in the event that you suffer from an accident or illness. It means you can pay your mortgage, cover your living costs and get better.

Myth 2: I need a secure income stream – fixed term investments are my only choice
To build up your retirement pool of wealth you need to invest your money to grow. Despite this, many people don’t invest for growth because they are afraid of losing money and don’t understand the real risks of investing.

This, and the mindset that investing in shares is akin to gambling, causes many people to invest their money in low-return investments which do not contribute to increased capital, income or purchasing power.

However, history has shown that shares are the best growth investments over the long-term – outperforming all other asset classes. To take full advantage of this, you should start investing now to take advantage of compounding – which will help grow your wealth faster!

Myth 3: I want to leave something for my family – I cannot touch my capital
Most people think only in terms of losing their hard-earned money when it comes to investing, and end up in low-risk, capital secure investments.

Unfortunately, when they end up investing in these types of asset classes eg cash, they do lose their money. This is because these types of investments lead to a loss in the purchasing power over the long-term due to inflation, which leads to a loss in capital value.

Plus, these assets don’t grow in value over the long-term, which means they cannot create wealth for the investor and provide greater income over the long-term.

These consequences arise simply because the investor doesn’t understand the risks associated with investing in growth assets.

As at 12 May, 2006 Doc Owner: < >