Let's talk #Retirement

The words “retire” and “retirement” derive from the French retirer, meaning to withdraw. The common definition of retirement today is to leave your job and stop working altogether.

In general terms, the 95% of us the human populace follow the same trajectory..

We spend most of our lives between the ages of 6 and 22 being taught skills that enable us to enter the workforce. We remain employed hopefully till we reach our 60s, and hopefully we have amassed enough savings to then live off till we die.

We spend 90% of our lives training and saving with the hope of living for 10%?

Whos to blame for this?

The Germans!!

The year- 1889.

The man - Chancellor Otto von Bismarck.

The idea - Retirement

“Those who are disabled from work by age and invalidity have a well-grounded claim to care from the state,” he said at the time. He wanted to address high youth unemployment in Germany by paying those 70 and older to leave the workforce, and other countries followed suit with retirement ages around 65 or 70.

But a lot has changed between then and now. We live a lot longer than the 70 year average mortality that was back then. If present trends continue, those aged twenty today can expect to spend up to a third of their lives in retirement

Governments don't sponsor retirement like they used to. Companies have shifted the responsibility of providing you an income from themselves to you individually with the change from defined benefit to defined contribution retirement schemes. 

And what exactly is the point of it all anyway? 

According to 10X Investments’ Retirement Reality Report of 2020, to the majority of South Africans, retirement is not a priority.

Presently, only some 3,2m South Africans (5,4% of the population) are older than 65 and a growing number and percentage are now in the second half of their working life, up from 12,1 % (4,4m) in 1990 to 16,9% (10m) in 2020, a potential tsunami of people nearing retirement with inadequate pensions.

In the Retirement Reality Report 2020 (RRR20), 40% of respondents younger than 35 expect to retire before age 60, ignoring that retiring early not only cuts into their saving years, but also adds to the years those savings must last. Only 9% of respondents over 50 still expect to retire before the age of 60. In fact, 36% of over-50s now expect to retire only after the age of 70, or not at all.

This is in line with the treasury’s estimates that 6% of people will have a decent retirement. The findings are based on a 2020 Brand Atlas Survey, which looked at the lifestyles of 15.1-million economically active people with a monthly income of more than R8 000. 

A Land in Crisis.

So what does 2040 hold in store for retirees?

An extra 30 years of life left over with only 10 years of income....