You’ve officially retired—so what comes next?
Retirement brings freedom, but also new decisions about how you spend your time and how you manage your finances. Getting both right makes a big difference to your lifestyle and peace of mind.
Here’s a step-by-step guide to help you settle into this next stage with more clarity and confidence.
1. Start With a Simple Plan
Before jumping into numbers and products, take a moment to think. What do you want from retirement? What does a good day look like?
Use pen and paper. Write down your goals—both needs (like food, medical care and housing) and wants (like travel or hobbies). Then look at how you’ll fund each.
Different goals have different timeframes. Emergency funds need to be safe and easy to access. Long-term income can be invested for growth. Getting this right from the start will help you avoid stress later.
2. Use Your Retirement Fund Wisely
If you’ve retired from a pension or retirement annuity fund, you can take up to a third as a lump sum. The rest must go into an annuity—either a living annuity or a guaranteed one. Provident fund members can usually withdraw the full amount.
The lump sum is taxed, but the first R550,000 is tax-free (depending on what you’ve withdrawn since 2007). While it’s tempting to spend it, consider using this money as your emergency reserve.
Taking a bigger lump sum means less capital to buy an annuity—so your monthly income may be lower for life. Spend carefully.
3. Choose Between a Living Annuity and a Guaranteed Annuity
A living annuity keeps your money invested, and you draw an income from it. You can adjust your drawdown (between 2.5% and 17.5%) and choose how your money is invested. You carry the market risk, but your heirs can inherit any leftover capital.
A guaranteed annuity gives you a fixed income for life, no matter how long you live or what the market does. The insurer carries the risk, but there’s no capital left for your estate when you pass away.
This is a big decision. It affects your income, tax, estate plan and risk profile. You can speak to an adviser or use our calculator to explore both options.
4. Invest Your Other Savings Thoughtfully
If you take your provident fund as cash, or you have other savings, you’ll need to manage that money too.
Keeping everything in a savings account feels safe, but won’t keep up with inflation. Interest rates change and the real value of your money may fall over time.
Think about your needs. If you’re planning a big purchase soon, keep that money in cash. But if you need steady income for the next 20 years, you’ll need long-term growth—and that means investing. A well-diversified unit trust or balanced fund could work well.
5. Align Your Lifestyle With Your Finances
Now that your working income has stopped, your spending needs to match your retirement income.
That might mean small changes, like driving a more affordable car—or larger ones, like downsizing your home. The earlier you make those decisions, the more in control you’ll feel.
Living annuities, low-cost investments and growth-oriented portfolios can stretch your capital. But you still need to be realistic about what you can afford.
6. Update Your Will and Beneficiaries
Make sure your will is current. Also check your beneficiary nominations on all your investment accounts, policies, and retirement products. This helps your assets go where you want them to—without delays or tax issues.
Your priority will likely be to provide for your spouse or dependents. Once that’s covered, you can consider other bequests.
7. Share the Admin Details With Your Partner
In many relationships, one person handles finances, while the other manages the home. But if one partner passes away or becomes ill, the other may suddenly need to manage it all.
That’s why it’s useful to leave a clear set of instructions. Include passwords, account info, payment dates, where important documents are kept and contact details for advisers or service providers.
Don’t forget practical tips—like how the alarm system works or where the spare keys are. A simple folder or digital file can save a lot of stress later on.
Retirement Can Be Rewarding—If You Plan for It
Retirement is one of life’s biggest transitions. And while it may feel like the end of something, it’s also the beginning of a new chapter.
The good news? With a bit of planning and a few smart decisions, you can set yourself up for a retirement that’s not just financially secure—but also personally fulfilling.
If you’re unsure how much income your savings can provide or how long your capital might last, try our Retirement Calculator to get a clearer picture.
If you’re unsure about how to manage your retirement savings or structure your income, speak to an Investonline adviser. We’ll walk you through your options and help you make decisions with clarity and confidence.
