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Your checklist a year before retirement

Even if you are looking forward to the end of your working life, the idea of retirement can be daunting.
Image: Shutterstock

There is often an instinctive fear of moving into a stage of life where you may end up consuming your capital, as well as anxieties about a diminishing lifestyle. Like most challenges in life, preparation is key.

Here is a pre-retirement checklist to help ensure you’re on track:

Refine your budget

Your financial situation will most likely change during retirement so it’s important to have a clear and defined budget. Before retirement, it was up to you to build a savings pot to fund the lifestyle you wanted in retirement. Once you retire, you will need to deal with what you have and adjust your lifestyle to what you can afford. 

Work-related expenses, such as travelling and office attire, will fade away, but your spending might increase in other areas, such as medical expenses. By refining your budget in advance, you will have a better idea of how to manage your money during retirement, instead of allowing it to control you.

A few things to think about: 

  • Calculate a sustainable income that will last your retirement years by consulting an appropriate retirement planning tool or speaking to your financial advisor 

  • Bear in mind that your expenses will change in retirement

  • You should consider making some changes before they are forced on you, such as trading in your fancy wheels for a more affordable vehicle, or downsizing to a smaller home.

Understand your healthcare plan

The reality of ageing can be daunting, especially when considering factors such as medical aid costs and healthcare needs. Remember: Getting old is a privilege denied to many. 

As the proportion of older people in our population increases, so does the overall burden of illnesses that tend to hit the elderly. In its report on mid-year population estimates in 2020, Statistics SA noted that population estimates indicate that the proportion of elderly people, defined as those aged 60 and older, has grown from 7.6% in 2002 to 9.1% in 2020.

The report adds: “In recent years, South Africa has moved from a country suffering mostly mortalities from communicable diseases such as tuberculosis and HIV/Aids – which are often concentrated at younger ages – to scenarios where most causes of death are attributable to non-communicable diseases manifesting at late ages, such as strokes or heart disease.”

If you don’t have a good healthcare plan in place, your retirement could become a costly exercise of paying off medical bills, not to mention the potential for further stress-related illness. You will be much better off, financially and emotionally, if you know in advance what your medical plan covers. 

Here are a few things to consider: 

  • Healthcare needs and costs usually increase after the age of 55, especially if you or your spouse is a chronic disease patient 

  • Cover you have for medical costs and/or disability during your working life may come to an end when you retire. According to Mica Townsend, business development manager and employee benefits sonsultant at 10X Investments, “Even employees with excellent healthcare cover as part of their remuneration will need to check if these benefits follow them into retirement.” 

Decide between a living annuity and a guaranteed annuity 

A key decision as you are approaching retirement is how best to draw an income from your retirement savings. There are two main product choices available to you: an insurance-type product called a guaranteed annuity and an investment-type product called a living annuity. These products meet different needs so you will need to decide which one is best for you. 

You will need to consider a host of factors that are specific to you, including your health, age and life expectancy; how much you have saved; your desired income; whether you prefer a secure or a flexible income; the needs of a financially dependent spouse; and whether you want to leave money to heirs. 

This table summarises differences between the two product types:

Think about your estate

You should regularly update your will and any nomination forms on your policies to reflect your latest intentions and circumstances. The principal concern for many will be to secure their partner financially before considering any other bequests. However, it is important to always keep information about all your dependants and beneficiaries up-to-date. 

Think about how you’ll spend your time 

As enticing as the prospect of shedding work responsibilities can seem at first, the reality of having so much free time stretching into the future can quickly feel overwhelming. 

For most people, living a happy retirement requires some discipline, often in the form of routines that give structure to the days and weeks. It can be useful to allocate time to accomplish specific tasks, such as housework, exercise, social activities and intellectual pursuits. Having some type of routine or structure in place helps one appreciate unstructured time like weekends or holidays.

On top of these sorts of daily routines, you may also want to start thinking about the interests and activities that give you pleasure. Ask yourself what brings you joy. Whether the answer is spending more time with your family or embarking on travel adventures with your spouse, you will have plenty of time on your hands to figure out what makes life in retirement more meaningful and enjoyable. 

Even if one has longed for the demands of working life to come to an end, retirement brings with it many challenges. Some thoughtful planning can go a long way to reduce the stress of this major transition and make you feel more confident during those golden years you have been dreaming of.

Asavela Gwele is client relationship associate at 10X Investments.


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You may want to think up a side hustle e.g. training new entrants for your previous employer, part time work in your field, start an entirely new business, go on courses.

Being retired often leads to depression

Something like 80% of new businesses fail.

Something like 75% of all stats are made up on the spot.

If anyone plans for retirement one year ahead of the eventual date they are doomed. Retirement planning should be a much longer term exercise (I planned 10 years ahead of retirement) also you need time to evaluate your pension or retirement funding. Also some of the larger expenses you will incur in retirement, servicing your bond, repayment of motor vehicle and replacement , rates on property plus utilities. there are other which should be looked at by individual – just remember you could be on retirement for 20 odd years

I agree, but this is just a check list one year prior to the fact, to make sure you have done your last minute reality checks before you take the plunge.

Do NOT commute ANY part of your pension funds into cash.

Too many retirees make this unbelievably silly decision, and dissipate these one-off funds on a new set of wheels (“… At last, I can buy the car of my dreams”). And take the holiday of a lifetime, etc.

Unless you have a generous pension, this is often the unwisest retirement decision one can ever make,because the decision is irreversible, and the tragic consequences of running out of money when you need it most, only become noticeable many years later, when it’s impossible to fix.

The other point that one should ALWAYS focus on is CONTINUING managing your finances for maximum capital growth.

Abruptly retreating into a strategy of cash and an excessively conservative financial mindset is financial suicide in a long term inflationary retirement.

You need your own financial nous to handle the financial advice from others. You can’t afford to be naive.

If one comes to the end of one’s career without having acquired SIGNIFICANT financial SELF-HELP – and especially WISE decision-making expertise on the way (and you demonstrated proven focus on this throughout your life) – then that has to be a MAJOR life’s skills fail – which unfortunately for you, will set you up to be taken advantage of by the nearest unscrupulous commission-driven “advisor” suddenly appearing to “help” you with your retirement jackpot. (A fool and his money are soon parted).

Well my focus was / is to maximise the amount of cash to take out – including commutation – while balancing tax exposure. Cash under my control – into forex and offshore investments – rather than a sitting duck for Treasury to ‘borrow’ and the ZAR to lose value, not to mention the admin fees regularly skimmed. Of course it depends on the amount of financial ‘nous’ one has and how flexible the pension fund you have is. My living annuity is generally way behind my personal portfolio.

I could not agree with you more on your writings. Many people only wake up shortly before retirement and then blames everyone else because of their own lack of knowledge regarding investment options available to you. In March 2020 everyone else was to blame because the market went down. Yet today 12 months later the are people who made huge profits on either the stock exchange or fund managers. There were funds giving returns in excess of 50% over 12 months. Nobody wanted to touch the property companies but look at the Index returns. Same goes for the ALSI Index. If you had money offshore there were a British Investment company doing 105% return over 12 months and was available to buy either directly or via certain SA Fund managers. There are websites available that provides daily movements in funds together with charts and performances. Make use of them and teach yourself and never be scared to ask questions. There is no such thing as a stupid question.

End of comments.





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