How to design your retirement and plan for its three phases
If you have saved enough for retirement you can design how you will spend your golden years.
Retirement is not something that just happens to you overnight. It is something you can design and there are three phases you can plan for.
As South Africa's population ages and life expectancy increases, retirement is becoming a phased, multi-decade journey that demands thoughtful planning, emotional preparedness and strategic financial insight, John Kennedy, Citadel director and regional head for Cape Town, says.
He says people now have the freedom to choose how they want to live, independently, while creating a legacy that truly reflects their values.
ALSO READ: Warning! The retirement savings gap is widening in South Africa
Your children need your independence
According to recent research, 43% of South African adults support their parents financially while raising their own families, creating multi-generational financial strain. Kennedy notes that this highlights the importance of retirees needing to be financially independent, not just for their own peace of mind, but for the well-being of their families.
'Your children need your independence more than they need your money or an inheritance. They want to enjoy their time with you.'
The dual responsibility of the 'sandwich generation', which places significant financial and emotional strain on families, often leads to delayed retirement savings, increased debt and heightened stress levels, says Kennedy.
'This is where comprehensive financial planning can be very helpful to navigate these challenges and ensure long-term financial stability for all generations involved.'
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Rethinking retirement: from destination to new beginning
'Retirement is not an endpoint today, but a new chapter. It can be the most liberating and rewarding time of your life, but only if you approach it with intention.'
Kennedy says the retirement journey can be viewed in three phases:
an active phase, where you can travel, spend time on your hobbies or enjoy family time,
a passive phase, where you can be less mobile, and
a supported phase, where your health or care needs increase.
'These phases each come with their own distinct financial implications, making a comprehensive, adaptable plan essential.'
Planning for these stages is not just about having enough savings but about aligning your financial resources with a particular life vision. 'You worked for 30 to 40 years and spent 60 000 to 80 000 hours crafting your financial life and therefore, retirement is your chance to design how you want to live next. That takes clarity and structure,' Kennedy says.
ALSO READ: 50 and still haven't saved? Here's how to kickstart your retirement plan today
Balancing spending and legacy: a structured approach to fulfilment
In a society where saving is sometimes prioritised above all else, many retirees are surprised to be encouraged to spend more, Kenndy says. 'It is counterintuitive, but in many cases, our role as advisors is to say: you have done enough, it is time to enjoy your money responsibly.'
Through detailed cash flow planning, retirees can safely spend during each retirement phase while preserving their long-term financial security. Kennedy says this planning goes hand-in-hand with legacy conversations, with your partners, children and advisors, which are financial as well as personal and emotional in nature.
'Legacy does not only begin when life ends. Philanthropy should be viewed as an important aspect of legacy planning. From family support to charitable causes, structured giving (of time and money) that aligns with your personal values, using a holistic approach to ensure long-term impact, is a good idea.
'We encourage individuals to think about legacy while they are still active through volunteering, mentoring, or structured giving. This is where professional guidance on how to set up a family office or philanthropic activities can enable a new era of responsible giving by the family. Ultimately, it is about living a life of purpose and making a difference, not just leaving money behind.'
ALSO READ: Saving for retirement? Try these tax-smart retirement planning tips
It is about relationships, not just returns
Kennedy emphasises that wealth management in retirement is as much about relationships and trust as it is about financial returns.
'In retirement, the questions become more nuanced. It is not just about earning but about sustaining, adapting and making sure that your decisions support your life as well as your loved ones.
'You need an advisor not just to crunch numbers, but to be a real sounding board, someone with insight and empathy who can challenge your thinking and walk the journey with you, whatever happens in your life.'
NOW READ: South Africa's retirement time bomb is ticking…
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