One year before retirement: your checklist

Even if you are looking forward to the end of your working life the idea of retirement can be daunting. There is often an instinctive fear of moving into a stage of life where you consume your capital as well as anxieties about a diminishing lifestyle. Like most challenges in life, preparation is key, says Asavela Gwele, Client Relationship Associate at 10X. Here she outlines a pre-retirement checklist that will help you make sure you're on track.

Refine your budget

Your financial situation will most likely change during retirement so it’s important to have a clear and defined budget. Before retirement, it was up to you to build a savings pot to fund the lifestyle you wanted in retirement. Once you retire you will need to deal with what you have and adjust your lifestyle to what you can afford.

Work-related expenses, such as traveling and office attire, will fade away, but your spending might increase in other areas, such as medical expenses. By refining your budget in advance you will have a better idea of how to manage your money during retirement, instead of allowing it to control you.

A few things to think about:

  • Calculate a sustainable income that will last your retirement years by consulting an appropriate retirement planning tool, such as the 10X Living Annuity Calculator, or speaking to your financial advisor 
  • Bear in mind that your expenses will change in retirement
  • You should consider making some changes before they are forced on you, such as trading in your fancy wheels for a more affordable vehicle, or downsizing to a smaller home

Understand your healthcare plan

The reality of ageing can be daunting, especially when considering factors such as medical aid costs and healthcare needs but remember: Getting old is a privilege denied to many. 

As the proportion of older people in our population increases so does the overall burden of illnesses that tend to hit the elderly. In its report on mid-year population estimates in 2020, Statistics SA noted that population estimates indicate that the proportion of elderly people, which is defined as those aged 60 and older, has grown from 7,6% in 2002 to 9,1% in 2020.

The report adds: “In recent years, South Africa has moved from a country suffering mostly mortalities from communicable diseases such as tuberculosis and HIV/Aids – which are often concentrated at younger ages – to scenarios where most causes of death are attributable to non-communicable diseases, manifesting at late ages, such as strokes or heart disease."

If you don’t have a good healthcare plan in place your retirement could become a costly exercise of paying off medical bills, not to mention the potential of further stress-related illness. You will be so much better off, financially and emotionally, if you know in advance what your medical plan covers. 

Here are a few things to consider: 

  • Healthcare needs and costs usually increase after the age of 55, especially if you or your spouse are a chronic-disease patient
  • Cover you have for medical costs and/or disability during your working life may come to an end when you retire. According to Mica Townsend, Business Development Manager & Employee Benefits Consultant at 10X Investments: “Even employees with excellent healthcare cover as part of their remuneration will need to check if these benefits follow them into retirement.” 

Decide between a Living Annuity and a Guaranteed Annuity 

A key decision as you are approaching retirement is how best to draw an income from your retirement savings. There are two main product choices available to you. The first is an insurance-type product called a Guaranteed Annuity and the second is an investment-type product called a Living Annuity. These products meet different needs so you will need to decide which one is best for you. 

You will need to consider a host of factors that are specific to you, including your health, age and life expectancy, how much you have saved, your desired income, whether you prefer a secure or a flexible income, the needs of a financially dependent spouse and whether you want to leave money to heirs.

This table summarises differences between the two product types:

Think about your estate

You should check/update your will and any nomination forms on your policies to reflect your latest intentions and circumstances.

The principal concern for many will be to secure their partner financially before considering any other bequests. However, it is important to always keep information about all your dependants and beneficiaries up to date. 

Think about how you’ll spend your time 

As enticing as the prospect of shedding work responsibilities can seem at first, the reality of having so much free time stretching into the future can quickly feel overwhelming. 

For most people living a happy retirement requires some discipline, often in the form of routines that give structure to the days and weeks. It can be useful to allocate time to accomplish specific tasks, such as housework, exercise, social activities and intellectual pursuits. Having some type of routine or structure in place helps one appreciate unstructured time, say during holidays or at weekends.

On top of these sorts of daily routines, you may also want to start thinking about the interests and activities that give you pleasure. Ask yourself what brings you joy. Whether the answer is spending more time with your family or embarking on travel adventures with your spouse, you will have plenty of time on your hands to figure out what makes life in retirement more meaningful and enjoyable. 

Even if one has longed for the demands of working life to come to an end, retirement brings with it many challenges. Some thoughtful planning can go a long way to reduce the stress of this major transition and make you feel more confident during those golden years you have been dreaming of.

For information on how to make your savings last in retirement download the free ebook here The South African’s guide to making your savings last in retirement (

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