Post Covid Retirement Planning - Should South Africans Invest Their Retirement Savings Offshore?

Post-Covid Retirement Planning is uppermost in many people’s minds. Many have seen the wreckage that covid has left behind. Few people in South Africa can look forward to a comfortable retirement. Only 6% of South Africans, according to the National Treasury, are on course to retire comfortably. For the remaining 94 percent, retirement means financial difficulty, relying on family to make ends meet, or, at the very least, a lifestyle downgrade. The majority of South Africans are potentially on the way to an undignified and uncertain retirement.

Those National Treasury figures are, however, from before 2019, before the COVID-19 pandemic hit. The speed at which life changed, and, for many, how drastically it was changed has jolted some into deeper consideration of their mortality, and yes, of their retirement, even if they are relatively young and their final day’s work is probably decades away.

If you begin reading and researching how to improve your retirement planning strategies, you will almost always quickly see that financial experts recommend going beyond the basic savings options and employer-sponsored retirement schemes. Now is the time to consider venturing into the world of active investing to help secure a more comfortable retirement and brighter future for yourself. And as the option is now well within the reach of the ‘ordinary’ South African, offshore investment is often mentioned as a good move.

The question you probably have is something along the lines of when considering post-Covid retirement planning, should South Africans invest their retirement savings offshore? This, and other related questions, are what we are going to take a closer look at here.

Post-Covid Retirement Planning.

What is Offshore Investing?

Offshore investing has seen a surge in popularity and implementation in recent years. This gain in popularity can be ascribed to the national government’s poor performance and extensive corruption, as well as the stagnation of the South African economy.

When local outlooks are bleak and bad news abounds, investors are compelled to hunt for investment opportunities in pastures that appear to be more fertile. Investors should, however, carefully analyze their reasons for wishing to invest abroad and ensure that their decision is not solely a knee-jerk reaction to local negative news.

In comparison to the local South African investment market, the global offshore investment environment is huge. Funds can be exposed to specific geographical opportunities in economies that are more stable and thus more predictable. Alternatively, they could be allocated to emerging economies in search of higher growth prospects. Also keep in mind that many large-scale businesses, such as information technology, have limited exposure in South Africa when compared to international options.

Post-Covid Retirement Planning

Will Offshore Investment Make for a More Secure Retirement?

The pandemic has left us all craving more comfort and security. Your interest in offshore investment has probably been piqued right now. You likely be worried about what long-term benefits it can offer to help ensure that your golden years after retirement are just that, rather than years, potentially decades, of financial struggle.

The fact is that offshore investing is often an excellent addition to a balanced retirement portfolio. And offers the following benefits (and more)

By diversifying your exposure to a single currency or country, investing offshore can boost your returns and lower your risk. Along with local investments, it can help to build a sound portion of your retirement portfolio.
More investment options: When you diversify internationally, you have access to a considerably broader choice of investment opportunities spanning countries, industries, companies, and currencies.
Spreading your investments across markets and currencies reduces the impact of currency depreciation, as well as political and financial developments, on your wealth.

The real key, however, is to make offshore investing just a part of a well-thought-out, properly structured Post-covid retirement plan. Local South African investment is not a bad move for retirement – it can be an excellent one, in fact – but the more sensibly diverse a retirement plan is the better.

Planning is more important than ever. Post-COVID, many people are saying to themselves ‘if I had only saved more I wouldn’t have run into trouble’ or ‘if I ended up so stretched financially while working, how would I cope if I wasn’t?’ While the past can’t be changed, it can be learned from. Now is the best time to work with an expert financial advisor to, among other things, discover how making offshore investment part of your retirement plan can boost its value and help guide you to that comfortable retirement you’re hoping for.

Don’t hesitate Gina valuable information from independent Financial experts and ensure your Post-covid Retirement planning is on track.