{"id":781884,"date":"2024-07-11T15:06:53","date_gmt":"2024-07-11T13:06:53","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=781884"},"modified":"2024-07-11T15:06:58","modified_gmt":"2024-07-11T13:06:58","slug":"half-of-south-africans-plan-to-work-beyond-retirement","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/781884\/half-of-south-africans-plan-to-work-beyond-retirement\/","title":{"rendered":"Half of South Africans plan to work beyond retirement"},"content":{"rendered":"\n

Many South Africans under the age of 60 plan to work beyond retirement age, with many seeing retirement as a transition phase. <\/p>\n\n\n\n

The 2024 FNB Retirement Insights Survey showed that the vast majority of South Africans are insufficiently prepared for retirement, mainly due to economic pressures and a lack of financial literacy.<\/p>\n\n\n\n

For the report, a mix of quantitative surveys and face-to-face interviews were conducted with
1,072 respondents between 12 January and 2 February 2024. <\/p>\n\n\n\n

Data from the survey showed that nearly 50% of respondents are not planning for retirement due to economic challenges, high immediate financial obligations, and the inability to save. <\/p>\n\n\n\n

“This year’s study validates the ongoing financial and knowledge barriers that South Africans face, which impede effective retirement planning,” said Lytania Johnson, CEO of FNB Personal Segment. <\/p>\n\n\n\n

“However, the responses also show a greater awareness of the importance of education in overcoming those challenges.” <\/p>\n\n\n\n

“Despite a landscape fraught with economic instability and rising living costs, there is a growing awareness of the need for structured financial education and more accessible planning services.\u201d<\/p>\n\n\n\n

Sizwe Nxedlana, CEO of FNB Private Segment, added that retirement outcomes are highly dependent on one’s income group, with higher-income individuals generally reporting better preparedness for retirement.<\/p>\n\n\n\n

Most South Africans struggle with savings and investment due to the current harsh economic conditions.<\/p>\n\n\n\n

\u201cThe gap between retirement expectations and reality is also concerning, with many respondents anticipating maintaining their living standards despite inadequate provisioning, particularly among younger respondents,” said Johnson.<\/p>\n\n\n\n

Despite the major challenges, the research also showed that several trends amongst individuals who have not reached retirement age (pre-retirees). <\/p>\n\n\n\n

For instance, there was a broad consensus on the value of having multiple sources of income and taking a disciplined approach to financial management, in turn, leading to greater confidence and control over retirement funds. <\/p>\n\n\n\n

This positive shift may already be happening, with roughly 75% of respondents who have an existing retirement plan feeling that they are on course for a good retirement.<\/p>\n\n\n\n

That said, an increasing number of pre-retirees believe that they need to continue working after retirement age. <\/p>\n\n\n\n

25% of respondents under 60 intend to work full-time after they reach retirement age, while another 25% plan to work part-time\/reduce hours. <\/p>\n\n\n\n

“The relatively high proportion of respondents who intend to continue working indicates that retirement is increasingly being seen as a transition phase rather than a complete withdrawal from the workforce,” said FNB.<\/p>\n\n\n\n

Notably, when breaking down income brackets, those earning the most expect to work full-time. <\/p>\n\n\n\n

76% of FNB wealth clients (over R150,000 per year)expect to work full-time when reaching retirement, while 24% expect to be working part-time. 0% of FNB Wealth clients in the survey expect to fully retire. <\/p>\n\n\n\n

In contrast, only 13% of Entry Wallet clients (under R3,500 per month) expect to work full-time at retirement, while 33% expect to retire fully. <\/p>\n\n\n\n

Notably, many South Africans over the age of 60 are still working. <\/p>\n\n\n\n

38% of respondents over the age of 60 are still working full-time, while 30% said that they are earning a secondary income despite being retired. <\/p>\n\n\n\n

7% are also working part-time. <\/p>\n\n\n

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Source: 2024 FNB Retirement Insights Survey <\/figcaption><\/figure><\/div>\n\n
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Source: 2024 FNB Retirement Insights Survey <\/figcaption><\/figure><\/div>\n\n\n

Post-retirement also showed shifting mindsets, with many designers more increased control over financial matters once retired. <\/p>\n\n\n\n

A growing portion of affluent retirees are also opting for living annuities to manage their retirement income. <\/p>\n\n\n\n

Roughly 10% of respondents that fall into FNB\u2019s emerging affluent, affluent & wealth segments bought a living annuity with 100% of their retirement benefit when retiring.<\/p>\n\n\n\n

On the other hand, one in five retirees in these segments withdrew the permitted one-third of their retirement savings in cash when they retired. The remaining two-thirds were invested. <\/p>\n\n\n\n

“Not only does this mean lower retirement income for the remainder of their lives, but if the one-third cash withdrawal amount was higher than the R500\u00a0000 tax-free withdrawal allowance, their tax liability could have significantly lowered the amount they received,” said FNB. <\/p>\n\n\n\n

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South Africa sitting on a retirement time bomb<\/a><\/blockquote>