Why retiring at 65 is no longer realistic. And what to do about it

2018-08-17 11:48

Some people have the firm belief that they will have enough money saved to support themselves from the time they stop working until they die.

They dream of retiring to a cottage by the sea, in a game reserve, or in the Cape Winelands. But there are several reasons retiring in your sixties and in luxury is no longer a realistic prospect. Here’s why:


Scientists claim there are people alive today who could make it to their 150th and beyond.

Just last year Professor Stuart Kim of Stanford University told NRK news: “I think there are those alive today who will live to be 200 years old.”

We are living longer, so if you are thinking of retiring at the age of 65, can you comfortably say you have saved enough to last you to your 100th birthday and beyond?

Even if you don’t make it to your 100th – do you have enough for the next 20 or 30 years?


Don’t retire fully if you haven’t saved enough.

“It’s a very old-fashioned way of thinking you can retire at 60 or 65. This is why many corporates don’t have retirement dates in employment contracts any more. Instead of retiring, I call it ‘working less’. At the age of 65 you don’t want to be working 60-hour weeks. This is better than sitting at home and relying on your retirement fund, which a lot people won’t be prepared for,” says Nola Rae, author of Money Wit.


Longevity is not a pensioner’s only threat. Just this month it was revealed that pensioners in the US are filing for bankruptcy.

According to a report in the New York Times, the rate of people 65 and older filing for bankruptcy is three times what it was in 1991.

The reason behind this sharp increase? It’s all down to a three-decade shift of financial risk from government and employers to individuals.

Back home we have similar concerns.

According to the Old Mutual Savings Monitor: among urban working households 40% of respondents said they have no form of formal retirement savings at all.

What’s more, 32% of respondents said they would rely on government and 38% their children to support them in retirement.


Don’t just rely on one pension fund or your family.

“People forget that funding retirement is not just made up of a pension fund. It’s a second property, savings or an annuity so you have another form of income besides that retirement fund. There’s never a guarantee that one savings vehicle will be enough. You need to diversify what will support you in retirement,” says Rae.

  • Invest your money more wisely. Warren Kopelowitz, CEO at My Treasury explains: “Efficient saving can make a massive difference to your wealth. Moving your cash from a call account that offers returns of 3% to a long-term fixed deposit with an interest rate of 10% for example, would effectively double your wealth over 10 years!”
  • Start saving earlier. According to Old Mutual Unit Trusts millennials (individuals aged between 18 and 34) are better savers than previous generations, but they are failing to invest for the long term. Elize Botha, managing director of Old Mutual Unit Trusts, says: “Unlike saving – which is setting money aside to meet short-term goals – investing builds sufficient wealth to secure a second source of income to one day hopefully replace your salary, which is the ultimate goal of financial freedom.”


When it comes to retirement homes you won’t be spoilt for choice. This is because you will, in all likelihood, not have saved enough to buy that quaint cottage on the beach.

At 60 you may still have debt or possibly even family living with you and relying on your pension fund or grant money.

What’s more, there will be a lot of competition for the most sought-after homes. According to the UN, there will be more than 10 million senior citizens in South Africa out of a total population of 65.5 million.


  • Find an affordable retirement home. Even if you are not close to retirement age, put yourself down on the waiting list for it now. Speak to your financial advisor on a regular basis to make sure you are on track with your savings for your golden years.
  • Become entrepreneurial. If you need to live in your home but can’t afford to do so, find ways to make money from it. “Find other ways of making an income such as adding rooms and renting them out. Maybe you are a good cook and can make ready-made meals for young families in the area,” adds Rae.

If you want to retire in your sixties, it is important to find out if you can indeed manage this.

It is important to get expert help to ensure you are on the right path.

“You should meet with your financial adviser every year to ask about adjustments, how the market is doing and whether you are diversified enough. Financial planners should look at your whole wellbeing rather than just one investment to help you plan for your future,” says Rae.

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March 17 2019