Gone are the days of a smooth runway leading to retirement

Johannesburg - Retirement has been seen as a distant event that takes place in the far-off future. For many, it has been viewed as a well-earned reward for a lifetime of hard work. But times have changed, and so has retirement.

Gone are the days of a smooth runway leading to retirement, where a single job provided a pension fund until age 65 and a guaranteed income for life. Today's retirement journey is far more complex, filled with unexpected speed bumps, potholes, and sharp corners. It is dynamic, ever-changing, and requires a new way of thinking.

According to the recently released FNB Retirement Insights survey, there is an understanding that additional factors, such as generating more income, financial discipline, seeking expert advice, and conducting thorough research, play crucial roles in making informed decisions about retirement. Participants who felt they were on track with their retirement planning shared common characteristics. They had long-term retirement plans in place, sought expert advice, reduced their level of debt, and diversified their sources of income.

Bheki Mkhize, CEO of FNB Wealth and Investments echoes this sentiment and highlights that there’s growing recognition that retirement planning goes beyond simply holding financial products. He says that “traditional retirement models no longer apply in a world where we live longer, retire later, and seek fulfilment in our post-career years. We're exercising more, pursuing passions, and living life with renewed energy. But along this journey, many of us encounter setbacks such as job losses, illnesses, or even global pandemics, as well as milestones and successes. The road to retirement is no longer a linear path; it is a winding, unpredictable one.”

Building a retirement plan is important. According to the survey findings, approximately 49% of the individuals state that they cannot afford to save for retirement as their entire disposable income is spent on other financial priorities.

Mkhize adds that, “Globally, retrenchments, career changes, entrepreneurial endeavours, and family responsibilities have reshaped our experience of the retirement runway. These experiences can have both negative and positive impacts on our retirement savings. They may deplete someone’s nest egg or, conversely, contribute to its growth through successful ventures. Today, the entire journey to retirement is, in fact, a crucial factor in determining our retirement outcomes.”

To navigate this new, dynamic retirement journey, we need to adopt fresh ways of thinking. Drawing on the wisdom of past retirees, we can craft a mindset that embraces the changing landscape of retirement. It's no longer an end-of-life task, but a lifelong endeavour that needs to begin as early in our lives as possible.

Retirement planning is not just about accumulating funds in a savings account; it encompasses all elements of financial well-being. It requires an integrated approach that considers our unique circumstances, challenges, and goals. There is no one-size-fits-all solution. Every individual's retirement journey is different, and it's time for the industry to acknowledge and support this diversity.

“We understand the need for such a paradigm shift. We recognise that the retirement journey is no longer a linear progression but a dynamic adventure. We believe in starting the journey on day one, rather than postponing it to one day in the future. By taking a holistic view of financial planning and retirement readiness, we help individuals embrace the highs and lows of their dynamic journey, ensuring better retirement outcomes,” says Mkhize.

Perceptions on the retirement industry needs to shift to support individuals on this transformative journey. The findings of this first FNB Retirement Insights Survey confirm that there is an urgent need for this paradigm shift. “Embarking on this new era of retirement planning should be a goal for each one of us. Together, we can rewrite the narrative, redefine success, and embrace the dynamic nature of the journey to build a fulfilling retirement outcome that reflect the uniqueness of each individual. Day one is here - let's start planning for the retirement that all South Africans deserve,” concludes Mkhize.