How I’m beating inflation’s impact on my children’s (and grandchildren’s) inheritance

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of 10X Investments.

It dawned on me the other day that if I want to have the vaguest chance of leaving something to my grandkids when I die, or even just of making certain I’m not a burden to my child, I’d best work out how to minimise the impact of inflation on my retirement savings.

As of April 2025, on an annualised basis, inflation is allegedly at 2.8%. The finer detail of what went up and what went down doesn’t really matter, but I do note Statistics South Africa’s cost-of-living disclaimer: it doesn’t measure all the items in its basket every month. So we probably couldn’t tell anyway.

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Usually, I try not to bring up the cost of food, education, fuel, electricity, and the like in polite conversation. But when I do share a link to an article on the inflation rate, I often get guffaws of disbelief. Given how much EVERYTHING is going up, is it any wonder Statistics South Africa calls it a basket and not a trolley? Who can afford a trolley?

I actually found a (very complicated) explanation on how to work out your own inflation rate on Statistics South Africa’s website. But I couldn’t get as far as actually working out how much more expensive my “basket” was getting over a certain period because the link was broken. Obviously.

Anyway, one of the examples Statistics South Africa gives in its most recent calculation is education. Apparently school fees are 5% more expensive in 2025 than last year, and I’ve definitely felt that. So maybe this is how the overall inflation number might feel too low for some South Africans: if the things you spend money on the most go up the most, it’s going to feel like inflation is rampant. Saying inflation is 2.8% year-on-year is meaningless until I understand how it impacts me.

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Whatever the number, it doesn't solve the conundrum of how to make more money come in. And none of this solves for the fact that I (and probably many of you) are what is called the sandwich generation: middle-aged adults who are caring for both parents and children. My parents are, thankfully, doing ok in retirement. So many others aren’t.

It’s on a generational basis that the compounded effects of inflation are really felt. I asked my AI friends about this (yes I know I really need to get a life and make real friends. Right now, I sound like that mad old cat lady who never goes anywhere).

In 1975, the average house cost around 30% of the average income. 50 years later, and that percentage has shot up to 56%. That’s depressing, to say the least.

So I needed to find some way of limiting the impact of inflation on me, but also on my kids and grandkids. This is incredibly important to me because I want my child, and her children, if she decides to have them one day, to have a better life than I have. It’s what moms and dads always want for their children. Unless the parents are sociopaths or otherwise deranged and should really be locked up somewhere.

I don’t want her to be a super thin slice of cheap meat in a sandwich.

This is why I need to stop looking around for the responsible adult and accept that I need to be that responsible adult. I can’t be a burden to my child and make her be my retirement plan.

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Given that I know I’m not saving enough (and I bet a few of you are nodding along with that statement) I need to find ways to make my money work harder for me. That, or the dog needs to get a job…

One way I can do this is by cutting out some spending. And not education. Never education. I can consolidate debt, freewheel down inclines when I am brave enough to get out on our roads, buy cheaper groceries (and never buy cheese), or I can seriously look at where I can be smarter about how, and where, I invest my money.

This way, I can leave a legacy for future generations instead of being a burden to them.

In case you didn’t know, in order to leave retirement assets to nominated beneficiaries outside of your estate (i.e. largely tax free) when you die, you need to have a living annuity. I wrote about the difference between life and living annuities here, with a brief explanation as well as pros and cons of each. I’m not going to espouse which is better for you, as that depends on you and your situation. Chat to an expert.

I’d be lying if I said I can completely cut out cheese, and chocolates, although I do freewheel on downhills. What I can point to as a more realistic solution than holding myself hostage every month is getting more out of my money by spending less in investment management fees. If I can drop what I pay in fees as a percentage down from 3% to 1%, then that means close to an extra (free, mahala) R400,000 on an initial R100,000 investment over 40 years. The smart people at 10X have graphs and things that show this all very nicely over here.

Ha! Now that’s like negative inflation. Compounded. Suits me.

P.s. It's worth remembering the 'Golden Equation' in all of your planning:

Fees + Inflation + Income Drawdown must be less than or equal to your Return On Investment and all other things be equal you will never run out of money in retirement.

You can control your fees and how much income you draw down (to a point - we all have to eat and live our lives). So maybe try and control those?

What's the best return on any investment? The knowledge that I've left a legacy for future generations, long after I am gone.

Hopefully having died quietly in my sleep, and not murdered by my cat.

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