At some point, we’ve all imagined that dream retirement – sailing through the Bahamas, sipping cocktails at noon, waking up without an alarm. Retiring early. Living freely. On your own terms. But for most, that dream fades as life gets in the way. Expenses pile up. Habits form. Long-term goals slip through the cracks. And while we’re often told, “Money can’t buy happiness,” the truth is that money can solve a lot of real-life problems – housing, food, transport, security… and most importantly, the ability to retire.
According to a study by Old Mutual, only 6% of South Africans can retire comfortably. A sobering number, so the question is…
Why can’t most people afford to retire?
It comes down to one word: compounding.
Not just the compounding of money – but the compounding of decisions and habits made over time. It’s rarely one massive mistake that derails a retirement plan. It’s hundreds of small ones that quietly add up over decades.
Consider weekend habits: are you investing in yourself, or numbing the stress with takeaways and bottles of wine? Are you putting money away for your future, or racking up credit card interest on things you can’t afford? One cigarette isn’t the end of the world. But a pack a day for 40 years? That’s R300 a week – over R600,000 gone by retirement age.
Now imagine putting that same R300 a week into a tax-free savings account (TFSA), earning a modest 6% annual return. By 65, you’d have around R2.4 million, tax-free. That’s the difference between retiring broke – possibly ill – versus passing on wealth to your family.
The point? Financial freedom doesn’t come from one big moment. It comes from decades of small, smart choices.
So how do I build a financial plan that actually works?
There’s no perfect formula – everyone’s financial situation is different. But most solid retirement plans follow the same basic structure.
Step one? Get out of debt.
When you’re in debt, you’re paying compound interest in reverse. Every rand spent on interest is a rand that could’ve been working for you. Credit cards, car loans, store accounts – these eat into your future. Even home loans, while less toxic, still cost you more over time unless you pay them down faster.
Once you’re debt-free, start investing.
The South African government created TFSAs to help you do exactly that. You can contribute up to R36,000 a year (and R500,000 over your lifetime), and all the interest, dividends, and growth is completely tax-free. If you’re not maxing that out first, you probably can’t afford the risk that comes with other investments just yet.
Once your TFSA is full and your emergency savings are sorted, then – and only then – you can start exploring higher-growth options like offshore ETFs, the S&P 500, or structured portfolios. But without the basics in place, even the best investment strategies won’t fix poor foundations.
A solid plan doesn’t just help you retire – it helps you sleep at night.
But what if I’m starting late – is it still worth it?
Yes. Always.
There’s a saying in investing: “The best time to start was yesterday. The next best time is today.”
Even if you’re five years from retirement, or in your fifties with no savings, the principles still apply. Cut debt. Save what you can. Use your TFSA.
Build discipline. Because the truth is, something is always better than nothing.
No, you might not retire with a yacht and a beachfront property. But you’ll retire with dignity. And maybe most importantly, you’ll build the kind of financial behaviour that opens doors to better opportunities – higher income, smarter choices, a better future.
Planning for retirement doesn’t require perfection. It requires consistency, self-awareness, and a willingness to act now – even if now isn’t ideal.
Your financial future isn’t built in one day. It’s built in small decisions, made every day. And those decisions don’t just impact you – they shape the lives of the generations that come after you.
A solid financial plan is more than a budget or a spreadsheet. It’s a roadmap – one that trades instant gratification for long-term freedom. Whether you’re 25 or 55, the journey to retirement starts the moment you decide to change direction.
The destination is worth it.
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