Rainier van der Nest, Senior Business Development Manager, Glacier by Sanlam
Glacier by Sanlam’s latest survey reveals striking gaps in South Africans’ retirement readiness: 46% of over 500 participants don’t know what a life annuity is; 58% do not know the difference between a life and a living annuity. Nearly half (49%) don’t know how much they need to save monthly for the retirement they want – and for lower-income earners, that uncertainty drops only slightly to 40%. Almost half (46%) are not saving or investing towards retirement at all.
These figures reveal more than financial shortfall – they signal a mindset gap. Mastering the mindset shift to retirement is as much about emotional readiness and perspective as it is about numbers. It’s a transition from accumulation to preservation, from income generation to income sustainability, and from individual success to intergenerational significance.
The four pillars of a confident retirement
At Glacier, we believe that every confident retirement plan stands on four essential pillars: flexibility, longevity, legacy and growth.
Flexibility allows you to adapt as life, health or markets change. Longevity ensures your income endures as long as you do. Legacy gives meaning – what you pass on to loved ones and causes that matter. Growth protects against inflation, that slow, silent force that erodes value over time.
These pillars aren’t static. Their importance shifts with each life stage – the same person who values flexibility in their 40s might prioritise certainty in their 70s. No single product perfectly captures all four, but with a clear plan and trusted advice, you can find the right mix for your stage of life.
From building to sustaining
For Boomers and Generation X nearing or entering retirement, this phase marks the start of the great shift in emphasis, when the focus moves from growing wealth to preserving and using it purposefully. Longevity and income certainty are crucial financial objectives, and choosing the right retirement income solution is the most certain way to achieve them.
A life annuity provides a guaranteed income for life. Once purchased, it transfers investment and longevity risk to the insurer – meaning you’ll continue receiving an income no matter how long you live or how markets perform. The trade-off is flexibility: the income level is fixed, and the capital cannot be accessed or inherited after death.
A living annuity, on the other hand, gives you control over how your retirement savings are invested and how much income you withdraw each year (within regulatory limits). It allows for market participation and potential growth, but the risk rests with you – if markets underperform or you draw too much, your savings could run out.
Today’s retirees are increasingly choosing hybrid approaches that combine the best of both – blending the certainty of a life annuity with the flexibility and potential growth of a living annuity. One practical strategy gaining traction is stepping: investing in living annuities and converting these into life annuities over time. This allows you to take advantage of higher guaranteed income rates from life annuities when interest rates rise, while keeping part of your portfolio flexible for changing needs or market opportunities.
The greatest gift you can give your family isn’t only what you leave behind; it’s the financial stability and confidence you maintain throughout your life and your financial independence well into retirement.
Our survey showed that giving children opportunities is people’s fourth highest financial goal; passing on assets ranked sixth. If you’re able to do so, one of the best ways to make a material difference is to contribute to a tax-free savings account (TFSA) or retirement annuity for your child or grandchild. Instead of buying toys, top up the TFSA to create a ‘nest egg’ that’ll kick-start financial independence.
Pillars for emerging generations
The four pillars – flexibility, longevity, legacy and growth – apply throughout, but the weight you place on them changes at different stages. During your retirement savings accumulation years, it’s all about growth. Volatility can be your friend when you’re young – every market dip lets you buy more at a lower price. Stay disciplined and consistent, and compounding will do the heavy lifting. Even five years of lost or gained compounding early on can completely change your future.
Flexibility matters too. Life happens – you change jobs, get married, have children – so your plan needs to move with you. The survey further showed that having savings ranked across the generations as people’s top priority, followed by retiring comfortably, and having investments. Investments mattered most to individuals aged 35-49. ‘Educating children’ was especially important to black households and people aged 16 to 34. To make meaningful progress toward these goals, young people need to treat saving as an expense, not an afterthought, and when you change jobs, don’t cash out your pension – preserve it!
The perfect plan
At the end of the day, good financial planning isn’t about chasing products or timing the market; it’s about balance. Every decision we make should come back to the four pillars: flexibility, longevity, legacy and growth. The art lies in understanding which of these matters most to you right now and knowing that it will change over time.
The perfect plan might not give you all four pillars at once; few do. That’s why the right adviser matters. A good adviser doesn’t sell you products; they apply them intelligently and provide a multi-faceted solution that helps you balance flexibility, longevity, legacy and growth as your life evolves.
As their client, ask how your adviser will communicate after the initial plan has been designed, who steps in if they move on, and what their written value proposition is. You deserve continuity, transparency, and a partner who puts your plan – not a product – at the centre. When advice is built on the right partnership, those four pillars don’t just support your wealth – they help it stand the test of time.
ENDS
