The retirement X-er factor

Farzana Botha

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 your client is one of these X-ers, Farzana Botha, Segment Manager at Sanlam Risk and Savings, suggests helping them assess their situation and put 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. As financial adviser, you can help to get a holistic view of their situation and create a roadmap to reach their 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 client to move past this, understanding that the sooner they act, the better and more in control they will feel.”

Botha suggests:

- Getting the information: The first step is to help them know where they stand. Use the Sanlam calculator to assess whether their current savings are on track for the wind-down years they envision.
- Remembering this too shall pass: Retirement usually comes with a specific timeframe and objectives. If they’re not on track, they may need to make sacrifices in their current lifestyle to live better later.
- Looking at expenditure: Even in tough times, there’s usually more people can do to cut back on expenditure and ‘up’ their retirement contributions.
- Making their money more efficient: Are they maximising tax reductions to align with their wind-down goals? Can you help them ‘skinny up’ their budget and redirect the funds to bolster retirement contributions?
- 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.
- Leaning on all the generations: Encourage your client to 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. “Guide your client to stay focused on what they want their wind-down years to embody. Then, 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 our clients to help them achieve the best possible outcomes, now and in their wind-down years.”