Retirement

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Retirement planning is really income planning

Two people with the same savings can be in very different positions. Start with the life the capital must support, and let the number fall out of that.

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An RA is a structure wrapped around investments

Not simply an investment fund with a tax advantage. What the structure supports, and when it may be wrong for money you could need before retirement.

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The payslip number is not what reaches your retirement account

The employer's total cost may also fund administration and insured benefits. How to reconcile the statement, and what changing jobs puts at stake.

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Preservation can create false comfort

Rules on transfers, withdrawals, retirement options and fees all still apply. Cashing out is not the same as a transfer between approved funds.

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Starting late is serious, not hopeless

Late is a planning fact, not a moral failure. The levers a plan can actually pull, and why catching up through extreme risk is rarely one of them.

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R3 million cannot tell you whether retirement is secure

A balance is a stock. Income is a flow. What has to sit beside the capital before the number means anything at all.

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Contributions should not be an invisible source of optimism

If the projection assumes contributions rise every year and the debit order stays flat, the balance falls behind even when the return assumption is met.

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9% growth with 5% inflation is not earning 9%

The gap between the two rates, after fees and relevant tax, matters more than the headline return. Two rates shape the projection, and neither is a promise.

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Moving the date is neat on paper and fragile in life

Retiring later adds saving years and removes spending years, which makes the date a powerful assumption and not always a freely available one.

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Life expectancy is an average, not an expiry date

Living a long life is good news. The risk comes from planning around a date that arrives too soon, and from assuming household costs halve after a death.

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Once withdrawals begin, the order of the years matters

Two portfolios with the same long-term average can end very differently if one takes its losses early. What to ask to see, beyond a smooth average.

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Product limits are not a drawdown plan

Rules may permit a withdrawal rate. That says nothing about whether your plan can carry it, this year or in ten years.

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Flexibility is the attraction and the responsibility

Your capital stays invested and you choose the income within a permitted range. The income is not guaranteed for life, and that is the whole trade.

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Guaranteed describes the promise, not protection from inflation

The insurer's commitment is contractual. A level income can still lose buying power, and the decisions become hard to reverse once it starts.

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Fees bite twice, before and after retirement

Before retirement they reduce the capital that compounds. After it they reduce the return supporting income. One total-cost view for each phase.

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On track is not an answer

The final years before retirement need a clear meeting about income, uncertainty and decisions that may be hard to reverse. One page, five headings.