Real SA retirement age actually 80: 6 tips to make funds go further

South Africans planning retirement at 65 years may have to reconsider their finances, as the latest data from Sanlam Corporate reveals the real retirement age is closer to 80. But with some savvy financial planning and investments, retirees can make that money go further.

“True financial independence in retirement happens around 80, not 65,” says Barto van der Merwe, managing director of Renishaw Property Developments: a subsidiary of the JSE-listed Crookes Brothers Limited and the developer of the mature lifestyle estate, Renishaw Hills.

“This means people either need to work an additional 15 years to enjoy financial security, or find ways to make those retirement savings last. Having analysed the market for the ongoing development of Renishaw Hills, we’ve taken note of how retirees can enjoy their lifestyle while not overspending retirement savings in this economy.”

Drawing from insights from Renishaw Hills, Van der Merwe shares six key financial strategies to help retirees enjoy their golden years – without the fear of running out of funds:

1. Avoid dipping into retirement savings early

South Africa introduced the two-pot retirement system in September last year, divided into a retirement component and savings component. While it may be tempting to dip into the savings component for emergencies, it’s best to avoid doing so where possible. The reason is retirees will lose the annual growth earned on this amount, plus having to pay tax on the amount withdrawn.

2. Consider easing into part-time work

Anyone who plans to retire at 65, or who works for a company that has forced retirement at that age, may want to look at generating an income stream through part-time work after 65. This could be in the same field of work, just in a personal capacity. Alternatively, retirees could look at monetising a hobby through online tips or courses. Working part-time in retirement not only improves financial standing but also provides opportunities for social connection.

3. Spend less to save more

Find easy ways to tighten the budget by cutting out expenses that don’t make a significant difference to quality of life. There may be cheaper substitutes, from groceries to streaming services, that can maintain living standards. By fine-tuning the budget, retirees will not only have more to save but will also be reducing income needs in retirement – a double win!

4. Invest in the right housing

Housing is often one of the biggest expenses in retirement, but choosing the right option can make a significant difference to one’s budget. Investing in a retirement village early on can see property value increase steadily over time. However, if the buyer doesn’t have sufficient capital, they could consider a reversionary transfer obligation model, which means enjoying the benefits of retirement living at a lower upfront cost, while still preserving the investment. This approach offers significant savings compared to purchasing a property outright.

5. Consider levies and amenities

When looking for ways to lower monthly expenses, it’s worthwhile investing in a retirement village or estate that offers affordable levies, which cover high-cost services like exterior building maintenance, garden upkeep and personal fibre Internet. These estates also have on-site facilities such as swimming pools, community centres, walking trails, sports facilities as well as various social clubs which are at no additional cost for the homeowner.

6. Go for off-the-grid living

Sustainable home features aren’t just convenient, they also provide long-term cost-savings. When buying a home, look at sustainable, off-grid features such as solar installations, inverters and batteries for constant electricity supply. Retirement estates can also have water treatment plants and water storage facilities that ensure uninterrupted water supply at a lower cost. Home designs that maximise natural lighting and cooling also go a long way minimising utility expenses.

Long-term savings with Renishaw Hills

Far from being just a retirement village, Renishaw Hills (pictured) in Scottburgh on the KwaZulu-Natal South Coast is a premier mature lifestyle estate for individuals over 50, offering a vibrant, active lifestyle.

Affordable levies include all exterior maintenance and insurance, garden services, refuse collection, postal services, fibre-optic Wi-Fi, cutting-edge security and healthcare options. There’s also access to fantastic communal facilities, more than 20 active clubs, and a variety of diverse activities.

Residents are offered water security through an independent water supply, which ensures uninterrupted water access.

Modern features included in these homes:

• SMEG appliances.
• Solar geysers to reduce energy costs.
• Inverter with battery backup.
• Wheelchair-friendly features with step-free access.

Renishaw Hills recently launched 16 exclusive apartments. Designed by ZAARC Architects, these 2-bedroom and 2-bathroom apartments range from 71m² to 108m² – nearly twice the size of the average apartment – starting from just R1 595 000. The apartments boast premium finishes, and extensive ocean and coastal forest views, all available with the choice of a spacious garage or an undercover parking bay. There are also additional garages and parking bays available for purchase by Renishaw Hills owners, which can also be used as storage space.

Renishaw Coastal Precinct

Renishaw Hills forms part of the expansive 1 300-hectare Renishaw Coastal Precinct, with only 20% of the area earmarked for development, while the remaining 80% is dedicated to conservation. This unique development offers a seamless blend of modern living and natural beauty, making it one of South Africa’s largest and most distinctive residential projects.