“Our internal member data indicates that while 65 remains the official retirement age, most South Africans can’t afford to retire at this age. Most people will need to work an additional 15 years to achieve financial security in retirement. This 15-year gap represents a financial challenge and a fundamental shift in how we think about retirement planning and employee benefits in South Africa. This gap between expectation and reality presents significant challenges for individuals, businesses, and the broader economy. It also highlights the critical role that holistic benefits will play in shaping a more secure future for our workforce.”

What this new retirement age means for SA

• For individuals: The extended working years have profound implications for personal financial planning and career development. Workers must now consider strategies for maintaining employability well into their seventies while managing health and skill development to remain competitive in the job market.
• For companies: Employers face complex challenges in managing an ageing workforce while balancing transformation objectives. Sanlam Corporate’s member data highlights the tensions between retaining experienced older workers and creating opportunities for younger employees in a country with high youth unemployment and one of the world’s highest youth populations. With almost 60% of South Africans under 25, according to Stats SA, young South Africans have even more competition for jobs.
• For the state: The data highlights critical implications for social policy and welfare systems in South Africa. The old age pension means test, designed to assess financial hardship among older citizens, presents a challenging paradox. On the one hand, individuals with preserved retirement funds may be disqualified from accessing state support. On the other hand, these same funds are often inadequate to ensure a comfortable and secure retirement, leaving many caught in a financial grey area. This underscores the urgent need for a more balanced retirement savings and state assistance approach.

“We have a responsibility to help South Africans retire with dignity, not decades past their prime," says Mkhize. This requires a coordinated effort from all stakeholders. This is not just about individual savings behaviour. It's about creating a sustainable system that works for all South Africans across generations. While the 80-year retirement age represents a challenging reality, it also presents an opportunity for innovation in our approach to work, savings, and retirement planning. If we want to change this reality, we need a collective commitment to providing holistic financial solutions that can help reduce the retirement age and accelerate a better working South Africa.”

The above sample is based on Sanlam’s Umbrella Fund members and not all South Africans.