For many South Africans, retirement planning starts with one question: “Will I have enough money?”
But financial experts say there is another question that is just as important: “Will my money keep up with rising costs?”
In SA, medical scheme contributions, municipal rates, electricity, security company and care costs are often higher than the published inflation figure
— Sino Booi, product management lead at Momentum Savings
According to Sino Booi, product management lead at Momentum Savings, many retirement plans run into trouble not because people start with too little income, but because they underestimate how much life can cost in later years.
A major challenge is that retirees often face higher inflation than the average South African. Expenses such as medical aid, municipal rates, electricity, security and healthcare services tend to rise faster than headline inflation.
“The overall rise in prices across all goods and services in an economy rarely reflects the reality of a retiree’s expense basket. In SA, medical scheme contributions, municipal rates, electricity, security company and care costs are often higher than the published inflation figure,” said Booi.
He said housing can also become more expensive over time. Retirement villages and estates offer convenience and security, but levies often increase sharply. Costs can climb even further if one partner requires frail care while the other remains independent.
Owning a fully paid-off home and car does not mean expenses disappear.
Retirees can still face large bills for home maintenance, vehicle replacement, security upgrades or backup power systems. These unexpected costs can quickly eat into savings, said Booi.
Another pressure point is family support. Many retirees continue helping adult children or grandchildren financially, sometimes for years. While often necessary, these ongoing commitments can place strain on retirement income.
Health-related costs remain one of the biggest risks.
Medical aid contributions typically rise as people age, and out-of-pocket expenses for specialist consultations, chronic medication and procedures can add up quickly. A contribution that feels affordable at 60 may become a serious burden by age 75 or 80.
Long-term care is another expense many people fail to plan for. The move from independent living to assisted living, home-based care or specialised dementia care can be extremely costly and often happens when families least expect it.
“People are also living longer. While increased life expectancy is positive, it means retirement savings may need to last 30 years or more. The later years are often the most expensive because healthcare and care-related costs tend to escalate,” said Booi.
There is also the risk that ageing can make it harder to manage finances. Having trusted family members, clear estate planning and proper financial support structures in place can help protect retirees from costly mistakes.
Booi said the best defence against rising costs is ensuring that retirement investments continue to grow faster than inflation. Without sufficient growth, retirees risk losing purchasing power over time, even if they appeared financially secure when they first stopped working.
“The retirement conversation should not only focus on how much we save. We also need to think about how much our expenses could increase and whether our plans can withstand unexpected shocks.”
In a world of rising costs and longer lifespans, retirement planning is no longer just about having enough money today. It is about making sure your savings can support you for decades to come.
Sowetan
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