Real Estate Investor Magazine South Africa April/ May 2020 | Page 62

RETIREMENT
Plan, budget & save
Avoid financial constraints during retirement
NICOLE CHAMBERLIN
The retirement industry, in the property sector, is evolving at a rapid
pace both to keep up with the elderly living longer and to keep up with
the standards of the innovation of the property sector.
“We are seeing residents starting home-based freelance and
consulting businesses to supplement their pensions and keep
busy. Just because you don’t have to work any longer, doesn’t
mean you have to stop putting your skills and expertise to
good use,” says Case.
2
The question of affordability
In South Africa, the above trend is also fuelled by
the fact that very few working-age professionals
are financially in the position to retire. The 2019
10X Retirement Reality Report has revealed that 67% of
economically active South Africans do not have retirement
plans or understand them.
All in all, 77% of respondents felt they needed to continue
working after 65 to make ends meet.
The 2018 edition of the 10X report showed that in 2018,
only 7% of those surveyed had a solid plan they understood
and 62% either didn’t save for retirement or didn’t know much
about their plans. Alarming stats.
4
Technology
Contrary to popular belief, today’s retirees are tech-
savvy individuals who are using smartphones, tablets,
computers, and electronic gadgets like everyone else.
In line with this, the internet plays a crucial role in their lives
to connect with friends and family, shop online instead of
going to shopping malls, deal with their finances and run their
freelance businesses.
“The demand for smart homes in retirement villages or
multi-generational estates is growing rapidly. Having a fibre
optic backbone and high-speed internet access is no longer a
nice to have. It has become a necessity,” Case says.
5
Safety &security
According to a Statistics SA’s 2018/2019 Victims of
Crime report, safety and security will also continue
to shape how and where people will want to retire. A
total of 1.3 million homes were broken into, with no physical
contact, last year. The problem is most likely much bigger, as
fewer than half of break-ins (48%) were reported in that year.
The poll further highlights some worrying
trends across South African demographics:
67%
72%
T
he second 10X Retirement Reality Report (RRR19)
reveals a profound lack of understanding among
retirees regarding what they have actually saved and
what they need to have saved. This speaks to the planning
of their retirement and the importance of doing thorough
financial planning, budgeting and saving for retirement.
A 2014 Merrill Lynch study found that nearly half of retirees
are opting to work during their retirement, which could mean
starting a business or consulting, teaching or taking up a short-
term job such as driving a rideshare or pet sitting. Current
retirees are thus living their post-work years completely
differently to previous generations of pensioners.
2020 Trends that could reshape your retirement plans
Today’s retirees, known as baby boomers born between
1946 and 1964, are living their post-work years completely
differently to previous generations of pensioners. As they are
mapping out their retirement plans, most of them are taking
a number of trends into consideration, caused by external
drivers and various economic factors, these are currently
reshaping the South African retirement landscape.
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APRIL/MAY 2020 SA Real Estate Investor Magazine
1
Working for longer
It is a misconception that people can’t wait to throw in
the employment towel as soon as they turn 65. Many
professionals have no desire to quit working after they
have hit that milestone. Many opt to stay in the workforce,
starting businesses so they can continue to engage with other
people or partake in passion projects.
About threequarters of United States’ respondents in a 2014
Merrill Lynch study, for instance, found nearly half of retirees
plan to work during their retirement on part-time or freelance
basis, which could mean taking a consulting or teaching job or
a short-term job such as driving a rideshare or pet sitting.
Financial adviser at Experience Your Wealth in Bristol, R.I,
Jake Northrup believes that the idea of retirement is flawed,
that it’s unhealthy for someone to work their whole life and
then suddenly stop.
Meanwhile, brand ambassador for Evergreen Lifestyle
Retirement, Arthur Case says It’s not very different on local
shores.
55%
No Retirement Plans
South Africans don’t have any form
of retirement plan or have little
understanding of their existing policy
or investment
Financially unstable in retirement are
concerned that they will not have
enough money saved to live on after
they retire
Do not afford saving towards
retirement
Monthly expenses and the rising
cost of living is preventing 55% of
South Africans from saving towards
retirement
3
Independent lifestyle
When it comes to where to live boomers are looking
for a high level of independence and convenience.
They definitely shy away from traditional institutional
retirement set-ups such as nursing and old age homes opting
rather to remain in their free-standing homes or move into
lifestyle retirement villages or multi-generational estates.
“The lifestyle retirement villages are being offered within
existing residential estates, but with access to resort style
facilities and communal spaces. This helps them feel young,
active, and part of society,” says Garry Reed, managing director
of Evergreen Lifestyle Villages.
77% Will need to work in retirement
Accept that they will need to continue
earning an income after they retire
72% Vague or no retirement plans
of women across all demographics
either have no retirement savings plan
at all or only have a vague plan.
In addition, there have been 260 000 house robberies,
crimes which involve physical contact.
“With mature people feeling more vulnerable as they age,
many are opting to live in gated developments as opposed to
their family home. Such estates offer the best of both worlds
I.e. independent living, an active lifestyle, and peace of mind. At
the end of the day, this is what your retirement chapter should
be all about,” concludes Reed.
SOURCE Evergreen Lifestyle
SA Real Estate Investor Magazine APRIL/MAY 2020
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