Posted on: 31st March 2025
Preparing for Retirement: Strategies for Different Life Stages
Planning for retirement might not be at the top of your list right now, especially if you're starting your career or busy raising a family.
But no matter your age or stage in life, thinking ahead can make a big difference to your future. The earlier you start, the more control you'll have over your retirement lifestyle.
In this article, we break down practical strategies for preparing for retirement, tailored to different stages of life.
Whether you're in your 20s or your 60s, there are steps you can take now to help build a secure and comfortable future.
Early Career (20s to Early 30s): Laying the Groundwork
This is the perfect time to start saving for retirement , even if it's just a little each month. Thanks to compound interest, small contributions made early on can grow into a healthy nest egg by the time you retire.
Key steps:
Start saving early:
open a
(RA) or a Tax-Free Savings Account (TFSA) and contribute regularly.
Join your company pension fund:
if your employer offers a pension or provident fund, join it as soon as possible. Employer contributions can significantly boost your savings.
Invest for growth:
you can afford to take more risks at this stage. A portfolio with a higher percentage of shares (equities) may give you better long-term growth.
Build good habits:
get used to budgeting, tracking your spending, and avoiding high-interest debt.
Mid-Career (Mid-30s to 40s): Accelerate and Strategise
You're likely earning more and possibly supporting a family at this stage. Reviewing your retirement goals and increasing your savings is a good time.
Key steps:
Increase your contributions:
aim to save at least 15% of your salary for retirement.
Reduce debt:
pay off personal loans and credit cards to free up money for saving.
Consolidate old retirement funds:
you might have multiple retirement accounts if you change jobs. Consider consolidating them for easier management.
Check your progress:
use online calculators or speak with a financial adviser to see if you're on track to meet your goals.
Balance your investments:
continue growing your
, but consider reducing risk over time.
Late Career (50s to Early 60s): Fine-Tune Your Plan
Retirement is getting closer, so now's the time to focus on the details and make sure you're ready.
Key steps:
Make catch-up contributions:
if you're behind, increase your savings while you still can.
Rebalance your portfolio:
shift to a more conservative
to protect what you've built.
Plan for medical costs:
consider how you'll cover healthcare expenses. Make sure you're on a good medical aid and look into gap cover or long-term care insurance.
Review your retirement budget:
estimate your future expenses and check if your savings will be enough.
Pre-Retirement and Retirement (Mid-60s and Beyond): Living the Plan
You've reached the point where you'll soon start using your retirement savings. Planning how to draw from your savings is just as important as saving it in the first place.
Key steps:
Set a withdrawal strategy:
make sure your money lasts by withdrawing wisely. Many retirees follow the 4% rule – withdrawing 4% of their total
savings per year
.
Understand the tax rules:
know how your retirement income will be taxed in South Africa.
Update your estate plan:
ensure your will is
up to date
, and review your beneficiaries and any trusts.
Think about lifestyle changes:
you might choose to downsize your home or move to a more affordable area to stretch your retirement income.
Tips That Apply to Every Stage
No matter where you are in life, some financial habits will always serve you well:
Build an emergency fund:
keep 3–6 months of expenses in a savings account so you don't need to dip into retirement savings in a crisis.
Avoid early withdrawals:
it can be tempting to cash out retirement funds when changing jobs, but you'll lose out on long-term growth and face penalties.
Get professional advice:
a financial adviser can help you create a plan that suits your life and goals.
Stay informed:
keep up with changes in tax laws, regulations, and retirement rules – like the upcoming two-pot retirement system in South Africa.
Final Thoughts
Preparing for retirement doesn't have to be overwhelming. By taking small steps at each stage of your life, you can build a future that gives you freedom and peace of mind.
Remember, it's never too early – or too late – to start planning.
If you're unsure where to begin or want a second opinion on your current plan, consider speaking to a trusted financial adviser at Holborn. Your future self will thank you.
Need professional financial advice?
We have 18 offices across the globe and we manage over $2billion for our 20,000+ clients
