Am I Going To Make It? Retirement

There are a few things we can wisely adopt before retirement which can assist our retirement savings and general savings as well. As mentioned in the last article, even before the pandemic hit household incomes, many South Africans were already pressed to save enough toward their retirement. In general, South African’s have a poor savings culture. The pandemic has simply compounded the existing issue. It is estimated that only about 6% of South Africans can afford to retire at 65. This leaves the majority of South Africans in the gap of living longer than their retirement savings.


1. The countdown
The more time between today and our retirement date, the better. Instead of having the putting-it-off thought of “I still have time”, we need to shift our thinking to “Now is the time”. Not only does this give us more time to save, but it also significantly impacts the type of portfolio we can structure. The younger we are, the more high-risk growth assets our portfolio can withstand. This type of structure promotes aggressive portfolio growth. The older we become, the more our portfolio should start to focus on capital preservation to get that portfolio ready for income withdrawals. More on our bucket approach for wise retirement withdrawals.

2. The favour of compound growth
Warren Buffet perceptively stated that someone is sitting under the shade today because someone planted a seed a long-time ago. Saving is like a seed. It may start small but with time, the correct conditions, and care it will turn into a great tree. We should make sure that our seeds are going into the correct soil. We may be tempted into believing that saving those small increments in our 20’s does not mean much, but the power of compound growth works beautifully in our favour.

3. Multiple-Goals and Multiple-Strategies
It would be wonderful if life had a single thing which we need to save toward, like retirement. However, that is most likely not the case. Before retirement along the road, we will probably come across: “saving for my child’s education”, “buy a house”, “buy a car”, “go on an overseas holiday”, maybe “start a business” … How do we achieve all of these goals? How do we save toward all of them without eating a staple diet of beans and toast? …

The answer, break up our investment goals into multiple targets by separating each portfolio. With this; know our goal timelines, prioritise, match the right portfolios to the right timeline, portion out and watch it grow. If you would like to speak to a consultant about this please feel free to email us at

4. Expenses in retirement
Understanding the expenses we are likely to incur during retirement is important. This will be different from person-to-person depending on unique financial circumstances. For example, do you own a house or will you be paying rent, do you own a car or will you be paying monthly instalments, do you have debt/loan repayments to finalise, what kind of lifestyle can you afford to live, and so forth. A large amount of retirement savings goes toward medical aid/ hospital plans and other medical expenses. Medical inflation is roughly 2% higher than normal inflation. Many people underestimate how much savings they will actually require during retirement.


With age, our bodies aren’t always as nimble as they used to be. Stretching becomes more of a necessity before and after exercise, not so much an option. However, when we are younger, we can also benefit from stretching, even though it may not be ‘as cool’. By starting to stretch when we are younger, we actually strengthen and prepare our muscles, joints, and ligaments for better recovery now and later. Similarly, some of these points on ‘how to stretch your retirement savings in retirement’ can actually be applied to our lives even before retirement. This sets us up in good stead and offers ease into lifestyle adjustments at retirement.

Here four small points to help stretch those Rands a little more in retirement…

1.Retire later
Not all of us have control over when we will retire. Considering to work a little longer than the stated ‘retirement age’ can help take some weight off of our retirement savings. Instead of working toward a set age, perhaps consider working toward a financial savings goal. Once it is met, then retire. Another thing to consider is the type of work we are doing leading up to retirement. If the job is physically taxing on our body, we may want to consider changing careers. This will allow us to comfortably continue to work in that role as we get older.

2.Work during retirement
Often people who are retired can be faced with boredom. There are elements to working that go beyond the financial provision factor. Work also provides people with a sense of achievement, contribution, socialising, creative expression, and growth. Part-time work opportunities like contracting, consulting, and seasonal work could not only assist the financial factor but also stimulate other important areas of our lives too. Age is but a number and everyone needs to feel a sense of belonging, contribution, purpose, and advancement in life.

Living within our means is important. During the expanding phase of having a family, houses tend to get bigger to accommodate the whole family. However, as children move out of the house, suddenly the need for such a large place may not be as feasible. Often in retirement, larger family houses are sold and a smaller property is either purchased or rented. Generally, the balance of the proceeds from the sale of the large family house would go toward the retirement savings to live from. However, the need for a big downscaling at retirement can be avoided if we adopt constant lifestyle adjustments throughout our different life phases. This not only can increase our current standard of living by not needing to keep up with unaffordable existing expenses, but it will also allow us to save more toward retirement comfortably. It can also help us avoid taking on unnecessary debt which we need to pay off in the future. We need to be honest with ourselves when assessing if we are living within our means.

4.Reduce living costs
This is linked to living within our means. Doing an honest expense analysis on our budget is also key. This goes for both Pre and Post -retirement. Remember that the habits we form today will be lifestyles we live in the future. We would be surprised at the total amount that all the little unnecessary expenses add up to. Even better, we would be extremely pleasantly surprised at how all those amounts can be translated to a significant amount in savings. Here are some examples we can ask ourselves; Do we really need two cars? Is shower gel really needed or is the trusty bar of soap just as good? Are we really using that gym contract or can we just get out and walk more? Do we have to eat out or order in every week … maybe we should just cook more? Do I really need barista-made coffees as many times as I have it in the mornings?

For more on retirement portfolios, products, and investment options please contact us at

– Cephas Dube & Kheara Lugg

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