2024 FNB Retirement Insights Survey: Many South Africans Plan to Work Beyond Retirement

A significant number of South Africans under the age of 60 intend to continue working beyond the traditional retirement age, viewing it as a transitional phase rather than a complete exit from the workforce. The 2024 FNB Retirement Insights Survey highlights that economic pressures and insufficient financial literacy contribute to the lack of preparedness for retirement among many South Africans.

The survey, which included both quantitative surveys and face-to-face interviews with 1,072 respondents conducted between January 12 and February 2, 2024, revealed that nearly 50% of participants are not planning for retirement due to financial challenges and the inability to save.

Lytania Johnson, CEO of FNB Personal Segment, noted that the study underscores the financial and knowledge barriers impeding effective retirement planning. Despite these obstacles, there is a growing awareness of the importance of financial education in overcoming these challenges. Johnson emphasized the need for structured financial education and accessible planning services amidst economic instability and rising living costs.

Sizwe Nxedlana, CEO of FNB Private Segment, pointed out that retirement readiness is closely linked to income levels, with higher-income individuals generally better prepared for retirement. The survey indicated that many South Africans struggle with savings and investment due to harsh economic conditions. Johnson expressed concern about the gap between retirement expectations and reality, especially among younger respondents who anticipate maintaining their living standards despite inadequate savings.

The research also identified trends among pre-retirees, including the value placed on having multiple income sources and disciplined financial management. Approximately 75% of respondents with an existing retirement plan felt confident about their retirement prospects.

However, an increasing number of pre-retirees believe they will need to continue working post-retirement. About 25% of respondents under 60 plan to work full-time after reaching retirement age, while another 25% intend to work part-time or reduce their hours. This indicates a shift in perception, with retirement seen more as a transition than a full withdrawal from the workforce.

Income levels also influence post-retirement work plans. Among FNB wealth clients earning over $8332 per year, 76% expect to work full-time, and 24% plan to work part-time. Conversely, only 13% of Entry Wallet clients (earning under $194 per month) expect to work full-time at retirement, while 33% expect to retire fully.

The survey also found that many South Africans over 60 are still working. Among respondents in this age group, 38% are working full-time, 30% are earning a secondary income despite being retired, and 7% are working part-time.

Post-retirement financial management is evolving, with a growing number of affluent retirees opting for living annuities to manage their retirement income. Approximately 10% of respondents in FNB’s emerging affluent, affluent, and wealthy segments invested 100% of their retirement benefits in living annuities. However, one in five retirees in these segments withdrew one-third of their retirement savings in cash, which could significantly reduce their retirement income and increase their tax liability if the withdrawal exceeded the R500,000 tax-free allowance.

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