Unretirement: Why Life Doesn’t Stop at 65

Summary

• 90% of under-60s in SA expect to continue working in some capacity after 65 (FNB Retirement Insights).
  
  

• Only 6% of South Africans are financially on track to retire comfortably (10X Investments Retirement Reality Report 2023/24).
  
  

• 28% plan to work full time, 25% part time, and 40% in side hustles beyond traditional retirement.
  
  

• Average retirement age in SA is closer to 80, highlighting systemic savings shortfalls (Sanlam Corporate research).
  
  

• Key strategies for unretirement success: boost retirement contributions, keep emergency savings, optimise tax, and seek professional advice.

More South Africans are ‘unretiring’ – working beyond 65 out of financial necessity or for personal fulfilment. But staying active in later life requires smart planning and flexibility.

Retirement is no longer the end of the road for most South Africans. Instead, many are embracing “unretirement” and continuing to work in some form beyond the traditional retirement age of 65. 

Two major forces are reshaping retirement norms: rising living costs and longer life expectancy. With everyday expenses accelerating faster than growth in pensions or savings, many individuals no longer feel financially ready to put their feet up during their golden years.

Over and above that, says Kate Robson, the co-head of Investec My Investments, is that the life stage of moving from working full time into the retirement years doesn’t “necessarily fulfil the purpose that many people thought it would”. 

Having had a job meant routine and social contact, and it instilled a sense of drive – things many new retirees miss. This craving for value and occupation is why consulting, board roles, lecturing, coaching, side hustles or part-time roles in the gig economy are increasingly popular posr-retirement choices.

“Your decades of expertise can add real value,” says Robson, adding that many retirees are redefining their post-retirement chapters on their own terms by mentoring, freelance consulting or monetising their skills online, given their flexible schedules.

Speaking on Investec’s Everything Counts podcast, Robson offers practical advice to avoid having to perform a second or third act in your career: “Don’t outsource your retirement to your employer. Make it your responsibility. As you would go to a doctor for your health needs, ensure your financial needs are being looked after.”

This means maintaining disciplined savings habits, even beyond 65, to avoid future shortfalls.

Retirement ‘time bomb’

According to the FNB Retirement Insights Survey, nearly 90% of under-60s expect to continue working in some capacity, with 28% planning to work full time, 25% part time, and 40% doing side hustles or pursuing other forms of income. Only 10% plan to retire fully.

Worse still, the 10X Investments Retirement Reality Report for 2023/24 warns that South Africa is sitting on a retirement time bomb, with only 6% of the country’s population on track to retire comfortably.

Legally, there’s no enforced retirement age in South Africa, though workplace contracts often impose one. Importantly, case law now confirms that employers cannot dismiss based solely on age once an employee continues working past retirement age – doing so may be automatically unfair dismissal under the Labour Relations Act.

Furthermore, Sanlam Corporate research indicates that the actual retirement age in South Africa is closer to 80, highlighting systemic funding gaps and emphasising why unretirement is becoming increasingly common.

What unretirees need to consider

Unretirement can be proactive, but it requires smart planning:

• Run the numbers: calculators often expose the shortfall between ideal retirement savings and reality. A net replacement rate of about 75% of your final salary is sufficient for most workers to maintain their standard of living in retirement. 
  
  
• Boosting contributions over time, such as increasing retirement annuity or employer contributions in line with salary growth, can help bridge gaps without reducing take-home pay. Sanlam recommends aligning contribution increases with annual raises to enhance retirement readiness.
  
  
• Maintain reserves: emergency savings should be separate from retirement pots, avoiding premature draws from the latter.
  
  
• Tax planning remains relevant: even in unretirement, taxable income applies. Thoughtful structuring of earnings, deductions and credit utilisation is vital to maximise post-tax income and preserve assets.
  
  
• Engage with financial advisers: Robson emphasises that professional guidance can help align lifestyle desires with portfolio strategy, tax obligations and health-related needs – even post-retirement.

The social and psychological value

Beyond the financial rationale, the social and cognitive benefits of continued engagement cannot be overstated. 

In an article published by Wits University, Anne Fitchett, an honorary associate professor in the School of Civil and Environmental Engineering, describes retirement as “a life stage transition that can take 10 to 15 years” rather than as a single event.

She’s the author of a paper titled “The Transition to Retirement from Academia”, and 65 herself when the article was released. She emphasises the importance of meaningful engagement, purpose and structure well beyond the official exit from full-time work. Her day includes exercise, crafting and possibly brushing up on her calculus. 

For many retirees, unretirement isn’t about necessity – it’s an opportunity to stay purposeful and connected.

The traditional view of retirement as a clean break at 60 or 65 is increasingly outdated. Rising living costs, increased longevity and poor savings habits have transformed the landscape of later life. 

Done effectively, unretirement can extend both financial security and personal fulfilment. But it requires preparation, foresight and professional stewardship – not just optimism. As the pace of socioeconomic change accelerates, those who plan flexibly will be best equipped to make their golden years truly golden.

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