Living longer and retirement planning

PEOPLE across the world are living longer, with economists forecasting that living to the age of 120 is now an imaginable concept within the next decade. This has significant implications for retirement planning, especially given the financial and lifestyle changes associated with this milestone.

The World Health Organization (WHO) predicts that by 2030, one in six people worldwide will be aged 60 or over, and the number of individuals aged 80 years or older is expected to triple between 2020 and 2050, reaching a staggering 426 million.

Given the implications of an ageing world and people living longer, there is a very real risk that investors could run out of money during retirement. If you have good health and can work for longer, delaying retirement could be a good consideration.

While it may seem difficult in practice, given that many companies in South Africa implement retirement for workers when they turn 60, they tend to look for opportunities, perhaps from a side hustle, a hobby, or consulting.

History has many examples of people who made their money after or near retirement age, because they either kept working, started their own ventures, or made money from their passion projects. While this may not be possible for everyone, embracing a mindset of postponing retirement can help you earn for longer. Retirement is the point when you start receiving an income from the money you have saved in your retirement funds. The decisions you make at retirement will determine how much income you receive from your savings and how long your money will last.

Crafford

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