A Mother’s Day gift that keeps on giving

Mother’s Day is around the corner and ads keep popping up on your phone and laptop suggesting treats, trips and trinkets for your original First Lady, but how about giving her something more meaningful this year, says Cedrick Pila, Business Development Manager at 10X Investments: “Helping her get her retirement on track is a gift that will keep on giving all year and so much longer.”

Money can be a tricky topic to broach with your mum, says Cedrick, but “any awkwardness will be forgotten when she sees how easily she can get a handle on what may seem like a daunting business”.

Taking the simple first step of getting a clear picture of your mum’s retirement savings situation will most likely save her a lot of worry and possibly mean quite a bit more cash in her pocket. 

If she is already in retirement and drawing an income from her savings this small step might set her on the path to saving a small fortune in fees, says Cedrick. “That would mean either an immediate pay increase for her, or the peace of mind that her retirement savings will last that many more years.”

If your mum is already retired and drawing down an income from her retirement savings she can use the 10X Investments’ Living Annuity calculator to work out how long her savings will last, based on the amount of income she is drawing each month and, importantly, how much she is paying away in fees. 

She might be spending more of her savings than is sustainable and storing up discomfort for when she is older. 

On the other hand, she might be spending less than she could be because she is anxious about outliving her savings. “No one wants to see their mother living a meagre, undignified existence and worrying constantly about money, especially if she actually has enough saved to live a comfortable retirement,” says Cedrick.

Perhaps she is losing a fortune in fees, in which case this small step will set her on the path to a big saving. She could use this saving to either give herself an immediate pay increase, or to reduce the amount she is drawing down from her savings and give her the peace of mind that her retirement savings will last that many more years.

Imagine your mum is drawing down a total of 5% of her capital each year, of which she is paying the industry average of 3% in fees. Someone else is taking 60% of her earnings; she is left with just 40%. Moving to 10X Investments, which charges less than 1% plus Vat in fees, your mum could continue to draw down 5% of her total savings, but pay herself a lot more ie more than 80% of the draw-down goes to her.

If your mum is still in the savings stage of her life she can work out if her retirement savings plan is on track by plugging a few basic numbers into the 10X retirement savings calculator. 

Both the Living Annuity Calculator and the Retirement Savings Calculator allow individuals to adjust the various inputs to calculate the best plan for their own circumstances, whether that be in terms of how much they are saving each month or how much they are drawing down each month as an income. 

“If your mum is a little tech-phobic, both calculators generate plans in PDF format that can be emailed and printed out for those who prefer paper versions,” adds Cedrick. 

“Then again, your mum might be a computer whizz and not need your help once you have pointed her to the online calculators. If you are surplus to requirements at this point you could offer to get her a a glass of wine or a cup of tea while she crunches the numbers.”

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