Drawing up a Retirement Inventory

retirement-inventoryAfter years of hard work, every working person looks forward to a comfortable retirement – with freedom from money worries and all the time in the world to travel, enjoy the finer things in life, and spend precious time with friends and loved ones.

The only thing standing in the way of a pleasant retirement is a lack of money, and the best way to prevent financial strain when you stop working is by drawing up a retirement inventory – let’s find out how.

What is a retirement inventory?

Most of us have drawn up an inventory before, but how can this help us to retire more comfortably? A retirement inventory is a different kind of list – it’s really a detailed record of all your income-producing assets.

Your retirement inventory contains the details of your pension fund, endowment funds, rental properties, businesses, and any other asset that will bring you an income when you stop working one day.

Why do I need one?

If paperwork isn’t your idea of fun, you might be wondering why you have to draw up another list of anything – but this list is different. By writing down your sources of retirement income, you’ll be able to assess your retirement situation with the help of your financial planner.

A retirement inventory is an excellent tool for analysing your assets and investments – here are some of the things you’ll discover by creating one:

  • How much you’ve actually invested – you’ll be able to calculate the total value of your portfolio
  • How much you still need to invest – by comparing your retirement goals with your current portfolio, you’ll be able to set saving and investment milestones and achieve them.
  • What types of assets you own – by analysing the assets and investments you have, your financial planner will help you to balance your portfolio
  • How much retirement income you’ll have – your retirement inventory will help you to calculate how much monthly income your portfolio could produce when you retire.

How do I draw up the inventory?

Now for the good news – drawing up a retirement inventory isn’t hard at all. By using Northwood’s retirement inventory worksheet (link?) you’ll have yours drawn up and ready to use in just a few minutes. Let’s get started.

Your retirement inventory is divided into two sections – a list of beneficiaries who stand to inherit in the event of your death, and a list of retirement assets that will produce an income for you once you stop working (we’ve called this second section your retirement payslip).

Beneficiaries and insurance cover

The first section on the worksheet asks you to fill out the details of any beneficiaries mentioned in your will, along with the amount each one should receive and for how long. You’ll also need to fill in a small section about disability insurance and dread disease cover, which are two essential types of insurance cover for any working person.

Your retirement payslip

This section lists all your retirement assets, including:

  • Pension funds
  • Endowment funds
  • Business ventures
  • Properties, and
  • Other sources of income

For each heading, you simply need to fill in the amount of monthly income you’d like to receive from that asset when you retire.

  • For example – if you’d like to receive R20 000 from your pension fund, R15 000 from a rental property, and R5000 from an endowment fund, simply fill in those amounts next to the relevant heading. If you’re planning on starting a business before or during your retirement, you should also include the monthly income you’d like to receive from your venture.

Need some help with your retirement inventory?

If you have any questions about drawing up your inventory, contact the Northwood team today. We’ll be happy to set up a consultation and guide you through the process.

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