How fathers can avoid the financial pitfalls of retirement planning
Explore the financial challenges South African fathers face as they navigate retirement planning. This Father's Day, discover how conversations about long-term financial well-being can secure a brighter future for families
Image: File photo.
Despite admirable efforts, 94% of South Africans are unable to retire comfortably. That's the sobering reality captured in recent industry reports and one that strikes especially hard as families prepare to celebrate the fathers who make it happen. While Father's Day is typically filled with dad jokes, braais, and socks with slogans, it's also a perfect point to reflect on what it means to be a committed father in South Africa today, financially speaking.
Being a provider is the role most fathers aspire to. But, more and more, this responsibility stretches well beyond day-to-day costs and monthly bills. JJ van Wyk, a financial adviser from Momentum Financial Planning, says, 'Being a father usually includes planning for a future in which they won't always be able to work, earn, or support their families directly. Yet, despite this, we see far too few fathers putting money away for retirement.'
According to the 2023 South African Retirement Reality Report by 10X Investments, just 6% of South Africans are confident that they'll be able to maintain their standard of living in retirement. That means 94% are either financially unprepared or unsure of what their retirement will look like.
'This is indeed a national crisis, but it's also a deeply personal one for fathers who want to spare their children from future financial strain,' says van Wyk.
This is where he believes retirement annuities (RAs) have become more than a simple financial product. They become an expression of long-term love and responsibility.
'A retirement annuity is much more than a tax-efficient savings tool,' says van Wyk. 'It serves as a declaration of your long-term vision – a commitment to growing old with dignity and providing your children with the freedom to soar, rather than being burdened by future obligations.'
RAs are often overlooked in favour of short-term savings or everyday financial pressures. But they offer several unique advantages. They allow you to contribute regularly towards retirement in a way that's both flexible and consistent. They're ideal for self-employed fathers or those without access to a formal pension or provident fund. And importantly, contributions to RAs are tax-deductible, meaning you can effectively boost your savings while reducing your tax liability.
'The tax benefits alone can be a game changer for fathers looking to stretch every rand,' adds Visagie. 'Beyond the numbers, it's the mindset shift that matters. You're not just planning for yourself; you're protecting the people you love from one day having to take care of you.'
In a country where the new generation is already under pressure to support ageing parents and young children, this shift is crucial. 'A father who takes charge of his retirement now can spare his family from tough choices in the future. Let them avoid that specific tax,' says van Wyk.
Van Wyk urges South Africans to reframe how we think about financial planning, especially around milestone occasions like Father's Day. While it's wonderful to celebrate dad with a new gadget, fashion, or fragrance, perhaps the greatest gift is a conversation about long-term well-being and financial independence.
'Let's use this moment to talk about legacy,' says van Wyk. 'Retirement planning isn't just about wealth – it's about peace of mind. It's about making sure our children are free to pursue their dreams, not tied down by our financial anxieties.'
As South Africa continues to grapple with economic uncertainty, rising living costs, and job market volatility, van Wyk urges fathers to prioritise retirement planning, not make it an afterthought. 'Retirement annuities offer a practical, powerful way to do just that. This Father's Day, start the retirement conversation for your family's future,' concludes van Wyk.
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