The retirement reality check: Why ‘later’ is now for younger South Africans

It is said that success favours the focused and that retirement is not an age, but a mindset.
This also rings true for retirement planning, when fear of complexity often leads to
procrastination in younger generations.

The landscape of retirement is changing. South Africans are living longer, navigating
unpredictable job markets, and grappling with the rising costs of living. Generation Z (born
between 1995 and 2012) and younger generations can often only start saving for retirement
much later because many could not find immediate employment in a struggling economy. However, Bertie Nel, Momentum Head of Financial Planning and Advice, cautions that
retirement planning cannot be a distant, abstract concern to worry about “later” for these
generations. As soon as they have found employment, they must realise that later is already
here.

It is a shift that demands a new conversation. One that moves from “I’ll plan when I’m older”
to “I must start now”, because younger generations face unique financial headwinds that
make early planning non-negotiable, says Nel. He adds that the traditional, linear career
path with a defined benefit or even a defined contribution pension is largely a relic of the
past. Many will experience ‘gig economy’ roles, periods of unemployment, or switch careers
many times. This variability means their retirement savings journey will likely be interrupted
and less structured.

He emphasises that delaying saving for retirement a few years comes at a significant cost,
largely due to missing out on the power of compound interest. Starting to save at age 25
versus 35 can result in a significant difference to the sum that’s available in a final retirement
pot, assuming the same contribution amount. “The single greatest risk younger generations
face with retirement is exactly this: sacrificing decades of compounding growth impossible to
recover later,” says Nel. He adds that longer lifespans also means savings need to stretch
further, potentially requiring a 30-year reserve instead of 20.

The financial world is complex, filled with acronyms, legal jargon, and what can feel like an
overwhelming number of investment choices – especially for a young person trying to
balance debt, career growth, and immediate expenses. For them, says Nel, figuring out what
the best and most tax-efficient investment vehicle is between a retirement annuity or a tax-
free savings account, and understanding long-term savings strategies can be overwhelming.
He says this is where a financial adviser adds value. Guiding you past the jargon to
investment vehicles that align with your risk profile and long-term goals, including those for
retirement, a financial adviser assists you to create a savings roadmap that is disciplined, yet
flexible enough to handle life’s curveballs.

A financial adviser can also help you establish flexible, goal-based strategies that can adapt
as your life changes, ensuring security and choice when you exit the workforce. They help
define what retirement looks like for you – whether it’s travel, supporting grandchildren, or
simply maintaining your current lifestyle.

But here’s the catch. Securing financial independence later in life requires more than good
intentions, says Nel. To achieve success in retirement is a science – one of focus and taking
responsibility – that also requires robust technology, deep expertise, and a network of
support. That is why it is important to partner with a financial adviser early for personalised,
informed advice to build resilient and future-proof retirement plans that are as dynamic as
your life.

In closing, Nel says that the best time to secure your financial future was yesterday. The next
best time is now, because success favours the focused.