Financial Planning for South African Retirees - 5 Tips for a Secure Future

On the back of the South African budget announcement, the reality is that the cost of living will continue rising, which means income and retirement savings will have to go further. Barto van der Merwe, Managing Director of Renishaw Property Developments, says there are several proactive steps South Africans can take to maintain a comfortable lifestyle in their later years.

“With South Africans living longer, and costs rising year-on-year, it’s important that people are planning for a retirement that allows them to enjoy a good quality of life without depleting their retirement fund early,” says Van der Merwe, whose portfolio includes the mature lifestyle estate, Renishaw Hills, on the KZN South Coast. “Financial security is a key component of retirement, as it can inform quality of life, so it’s important to get into the habit of building that retirement fund and cutting unnecessary costs where possible.”

He says the 2025 Budget Speech further reinforced the need for strategic financial planning, sharing advice for improved financial management and savings for retirees.

1.       Reduce Reliance on Debt

Unsecured debt, such as personal loans and credit card debt, can erode financial stability in retirement years. Van der Merwe says experts advise that no more than 15% of one’s income should be allocated to debt repayments: “Retirees – or those planning retirement - should prioritise clearing outstanding balances and avoid high-interest borrowing to secure their retirement fund.”

2.       Ensure Adequate Cover

With age comes the increased need for medical care. Van der Merwe says comprehensive health insurance can significantly reduce out-of-pocket expenses, while home and vehicle insurance can protect against unexpected financial losses. “It’s best to review coverage annually to ensure your policies remain suitable, and that you’re benefitting from the most cost-effective option,” he says. “Compare insurance quotes annually and ask about discounted rates.”

3.       Don’t Dip into Retirement Savings

“While the 2024 introduction of the two-pot retirement system has enabled more financial flexibility now, it also demands responsible long-term planning to prevent retirees from outliving their savings,” says Van der Merwe. “Early withdrawal means that retirees will lose the annual growth earned on the total amount, while also paying tax on the amount withdrawn.”

4.       Consider Alternative Income Streams

“Some people are looking forward to stopping work, but it’s often quite a tough adjustment for many – not just from a financial standpoint,” says Van der Merwe. “It’s well worth looking at the possibility of scaling down work so that it’s not such an abrupt shift, while also maintaining an active income stream. Alternatively, monetising hobbies or finding passive income streams to boost those retirement funds can go a long way in meeting those cost-of-living expenses.”

5.       Invest in Property Early

Finally, Van der Merwe says that investing in property early is one of the smartest financial moves retirees can make to secure long-term stability and wealth.

“Property is a tangible asset that not only appreciates over time but also provides a steady income stream through rentals if needed. Unlike volatile stock markets, real estate offers a sense of security, ensuring retirees have a valuable asset that can be leveraged if necessary. Buying property early also means taking advantage of compound growth, reducing the financial burden later in life.”

“Investing in an established estate such as Renishaw Hills is financially prudent as the region is comparatively affordable while offering an in-demand coastal lifestyle. Renishaw Hills also has all-inclusive levies that contribute towards maintenance and gardening, with access to world-class facilities in a welcoming retirement community.”

Get in touch!

Far from being just an active retirement community, Renishaw Hills in Scottburgh on the KZN South Coast is a premier mature lifestyle estate for individuals over 50, offering a vibrant lifestyle. For more details about Renishaw Hills or to arrange a tour, contact Kelly at 064 198 2693, email sales@renishawhills.co.za, or visit www.renishawhills.co.za. Check out the available units at Renishaw Hills: https://renishawhills.co.za/available-units/