Planning for retirement can feel overwhelming especially when it’s still years away, but a change in life can lead to a snowball effect and big problems later.

In South Africa, the 2024 10X Retirement Reality Report revealed that only 6% of South Africans believe they’re on track to retire comfortably, while 60% have no retirement plan or savings at all. The good news? Avoiding a few common mistakes can dramatically improve your financial future.

Here are 5 retirement mistakes you’ll want to avoid and fix before it’s too late.

1. Not starting early enough

The most powerful tool in retirement planning isn’t the fancy investment that you have stashed away or the high salary – it's time. Waiting to save means missing out on the power of compound growth, where your money earns returns on its returns.

Example:

If you invest R2,000 per month starting at age 25 (earning 8% annually), you could have over R7 million by 65. Start at 40? You’d only have around R2 million despite investing in the same monthly amount.

Avoid this mistake:

• Start as early as you can even small amounts grow big over time.
• If you are starting late, consider boosting your savings rate or working a few extra years.

2. Dipping into your retirement savings

When changing jobs, many South Africans cash out their retirement savings, often to cover short-term expenses but this can severely derail your future wealth.

Why it hurts:

• You lose tax benefits.
• You miss years of growth that could have multiplied your money.

Avoid this mistake:

• Transfer your funds to a 10X Preservation Fund, 10X Retirement Annuity (RA), or your new employer’s retirement fund.
• Treat retirement savings as untouchable like you would home loan.

3. Underestimating how much you’ll need

Many people assume they can live on 50–60% of their current income in retirement, but rising costs, healthcare, and longer lifespans often make that unrealistic.

Did you know?

A 65-year-old South African can expect to live another 15–20 years on average Based on people making healthier lifestyle options, there is a greater possibility of living longer which means many years without a salary.

Avoid this mistake:

• Aim to replace 70–80% of your current income in retirement.
• Use the 10X retirement calculator to help you estimate your gap and adjust your savings plan.

4. Ignoring investment growth and fees

High fees and poor investment choices can eat away at your retirement nest egg. Over the years, even a 1–2% difference in fees can cost you hundreds of thousands of rands.

Avoid this mistake:

• Review your retirement plan regularly to ensure it performs as expected.
• Avoid leaving money in underperforming funds just because it’s convenient.

5. Not planning beyond the money

Even with healthy savings, many retirees feel lost without a sense of purpose or social connection. Retirement isn’t just a financial shift; it’s an emotional one as well.

Avoid this mistake:

• Plan how you’ll spend your time, not just your money.
• Build routines, hobbies, and networks before retirement.
• Consider phased retirement or part-time work for a smoother transition.

Retirement is one of the biggest financial (and personal) transitions in your life. Avoiding these five mistakes can make the difference between struggling to get by and living the life you’ve worked so hard for.