A pension fund is a pool of money set aside by an individual for retirement benefits. The main purpose of a pension fund is to ensure that there will be enough money to pay an individual an income after they retire.
If you've ever found yourself in a phase of life where you needed to care for an elderly individual, you likely notice certain aspects of their experience as well as insights about yourself. Whether you're providing financial or physical support due to their health issues, you're aware of the challenges faced by both sides. For the elderly person, it's difficult to acknowledge and witness their own decline. They become frustrated with themselves when they struggle to walk, fall and need assistance to get up, or when they can no longer use the toilet independently and must wear an adult diaper.
There are moments when an elderly person may become emotional due to the difficulty of relying on others. For many years, you managed everything independently, but when illness or old age hits, you find yourself dependent on others. You can no longer drive, your reactions slow down, your hearing may be impaired, you begin to forget certain things or events, and you feel lonely. Your children work full-time, and your grandchildren are in school, leaving you feeling particularly lonely, especially if your partner has already passed away.
When an elderly individual is unable to care for themselves and either don't have children or their children are unable to take care of them, they need to seek a caretaker or a live-in care facility. This can be a very expensive undertaking, as caretakers and live-in care facilities can cost upwards of $1069 (R20,000) per month or more. Some care facilities may be slightly less expensive, depending on their offerings and size. Hiring a full-time caretaker to live with the elderly person 24 hours a day starts at $26 (R500) per hour.
This is when the pension fund you've saved for becomes crucial. Your monthly contributions must be sufficient to handle situations like this during your retirement. Financial advisors need to understand and get exposed to the experiences of elderly individuals, to effectively explain to potential clients why their monthly contributions to the pension fund need to be substantial.
We all dream of the day when we can retire from work and do whatever we want, but there comes a time in your retirement years when your body declines (as I have explained above), and then you need funds to be taken care of. Otherwise it will fall onto your children.
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