Why retiring at 60 could be the most expensive mistake of your life
The key isn’t to never retire, it’s to retire with clarity.
By Wouter Fourie (CFP®)
Director of Ascor® Independent Wealth Management.
Wouter Fourie is Past winner of the FPI Financial Planner of the Year competition and the co-author of The Ultimate Guide to Retirement in South Africa
Choosing when and how to retire is not just a financial decision, it’s an emotional one. It’s also one of the most complex decisions you’ll ever make.
It’s a milestone many dream of, walking away from the nine-to-five at 60, finally enjoying the fruits of decades of hard work. But before you hand in that retirement letter, it’s worth asking one critical question: can I really afford to retire now?
The reality is that retiring at 60 could be the most expensive mistake of your life, not because you haven’t worked hard, but because you may be unknowingly sacrificing long-term financial stability for short-term relief
Why timing matters more than you think
According to The Ultimate Guide to Retirement in South Africa, delaying retirement by just five years – from age 60 to 65 – can increase your pension income by up to 80%. That figure is no accident.
It comes from a combination of factors:
You keep contributing to your retirement fund
Your investments have more time to grow
You reduce the number of years you need to draw an income
You delay drawing from your capital, giving it room to compound
In short, the later you retire (within reason), the more financial leeway you give yourself. Conversely, retiring too early – without a tested, structured plan – can erode your retirement savings faster than expected.
Understanding the retirement math
Let’s consider a simplified example:
At age 60, you might retire with R3.5 million. If you draw R20 000/month, you’ll need that capital to last at least 25-30 years.
If you delay retirement until 65, that same capital base could grow to R5.5 million – and only need to last 20-25 years.
The difference could mean the ability to draw R25 000 or more, rather than R15 000-R18 000, while preserving long-term sustainability.
And that’s not factoring in unexpected costs like healthcare, support for adult children or grandchildren, or lifestyle inflation.
The problem with assumptions
Many people assume they’ll spend less in retirement, but that’s often not the case. Travel, hobbies, medical costs, and maintaining a standard of living all require a steady income. In our experience, most South Africans underestimate both their life expectancy and their actual expenses in retirement.
Some of the most common (and costly) assumptions include:
“I’ll need less money because I’ll slow down.”
“My expenses will decrease.”
“I can always downsize if needed.”
“I’ll make a plan when I get there.”
Without stress-testing these assumptions, many retirees find themselves adjusting their lifestyles downward – sometimes dramatically – within a few years of leaving the workforce.
Even small delays make a big difference
If you’re in your late 50s or early 60s and unsure about retiring, consider this:
Delaying retirement by even two or three years can reduce the draw on your savings and increase your eventual income.
It also gives you more time to clear debt, finalise estate planning, and reposition your investments for retirement.
If you’ve taken a severance package or are considering early retirement, speak to an advisor before making any irreversible decisions.
Already retired? It’s not too late to adjust
Even if you’ve already retired, the principles still apply.
You can:
Reassess your withdrawal strategy
Review your living annuity or investment portfolio
Update your healthcare planning
Adjust lifestyle spending in a sustainable way
The most important step is not to act in isolation
Retirement should be a reward – not a risk. Retiring early may seem like the dream, but doing so without a clear, tested plan can jeopardise the very financial security you’ve worked for all your life.
The best retirement decision is the one based on facts, not assumptions – and on advice you can trust.
For more information about retirement, consider purchasing the best-seller book by Bruce Cameron and Wouter Fourie called The Ultimate Guide to Retirement in South Africa, now in its third edition, and visit www.retirementplanning.co.za
This article first appeared on moneyweb.co.za at https://www.moneyweb.co.za/financial-advisor-views/why-retiring-at-60-could-be-the-most-expensive-mistake-of-your-life/
Contact Ascor®Independent Wealth Managers for retirement planning advice.
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