The Gen-X retirement journey: stop and take stock

Cape Town - The oldest Gen X-ers are about to turn 58, sitting just 7 years off the traditional time to retire. Globally, a flurry of headlines has started to warn that this generation is miles off where it needs to be when it comes to saving sufficiently to retire comfortably. If you’re one of these X-ers, Farzana Botha, Segment Manager at Sanlam Risk and Savings, suggests assessing your situation to get a solid plan in place.

Recent Sanlam research reveals that South African +50-year-olds seem split into two opposing groups. 25% of polled plus-50-year-olds said they’re planning to stop working completely; 24% said they cannot afford to stop working and will keep going for as long as they can. Income doesn’t account for this; 25% of those that claimed they cannot stop working were in the top income bracket.

Botha says, “This could be because people are afraid to cap their lifestyle or simply haven’t saved enough. It shows that the retirement journey is highly personal and complex, with challenges for everyone. My suggestion for X-ers is to pause and take stock. Speak to a trusted financial adviser to get a holistic view of your situation. And then create a roadmap to reach your goals.”

For X-ers not on track, Botha says now’s the moment to make some tough decisions. “Often, anxiety brings apathy and inaction. Work with your adviser to move past this. The sooner you act, the better and more in control you will feel.”

Botha suggests:

• Getting the information: The first step is to know where you stand. Use the Sanlam calculator to assess whether your current savings are on track for the wind-down years that you envision.
• Remembering this too shall pass: The wind-down years usually come with a specific timeframe and objectives. If you’re not on track, that means possibly making sacrifices to reach your goals over a short, specified period. You may need to compromise your current lifestyle to live better later.
• Looking at your expenditure: Even in tough times, there’s usually more you can cut down on and ‘up’ your retirement contributions.
• Making your money more efficient: Are you maximising your tax reductions to align with your wind-down goals? Can you ‘skinny up’ your budget and redirect the funds to bolster your contributions? Work with your adviser to make your money work harder for you.
• Considering agile products that offer some flexibility: Investigate retirement products that offer fixed and variable options, for growth and peace of mind.
• Chatting to a life coach: 34% of Sanlam’s total sample said they’re considering starting a second, gentler career in retirement; of these, 27% were +50 years old. Botha says the wind-down years could be an exciting time to pivot and forge a new path. A life coach could help give direction and clarity on how to personalise the journey and make it your own.
• Leaning on all the generations: Learn from other generations, past and emerging. The generations before embodied stoicism, commitment and loyalty. Those up and coming are tech-savvy, with a tendency to seek multiple revenue streams. Gen X has the benefit of hind- and foresight.

Botha concludes that the wind-down years may call for some tough decisions that’ll pay dividends down the line. “Stay focused on what you want this chapter to embody. Then, work with your adviser to craft a reasonable path to make this happen.

“Sanlam is committed to delivering on our promise to empower all Africans to live with confidence. That means working with people to help them achieve the best possible outcomes, now and in their wind-down years. We are walking this journey with you.”