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‘Second career’ a reality for many retirees

By June 30, 2014December 7th, 20224 Comments


Most South Africans are financially not ready to leave the world of work at the traditional retirement age of 60 or 65, and many embark on a ‘second career’ – either working longer in their current job, or starting their own business, the 2014 Sanlam BENCHMARK Survey has found.

“Of the 300 pensioners surveyed this year, one in five indicated that they supplement their retirement income with part-time work. In most instances, this is out of pure financial necessity. People are living longer, and it has therefore become much more expensive to retire,” says Kobus Hanekom, head of strategy, governance and compliance at Simeka Consultants and Actuaries.

“The problem is that you are currently compelled to retire and buy an annuity regardless of whether or not you intend to continue working. You then lose out on the benefits of compound interest that works in your favour over the last few years and have less time to save for a longer and more expensive retirement.”

Hanekom says the world of work is changing, and tax laws need to ‘catch up’ to enable phased retirement, which will make it possible for individuals to continue working – either in their jobs or doing another type of work – and keep their money growing in a pension fund. “This means that when you retire from your first career at age 60, you will be allowed to remain in the system and continue to contribute to a retirement fund during a second career. This will allow you to increase your retirement savings, benefit from the applicable tax advantages, and retire more comfortably at a later stage.”

He says delaying retirement by six years can double one’s capital upon retirement, while retiring six years earlier will leave you with half the capital to last an extended time period.

“Encouraging employers to reconsider the normal retirement age within their retirement funding arrangements is not an easy task – in fact, the retirement age of many corporate employers has decreased and is now closer to 60 than 65. There are many reasons why employers prefer an earlier retirement date – such as the need to remain BEE compliant – and these strategies are not likely to change. This is why phased retirement is such an attractive option – even though you have officially ‘retired’, you can park your pension benefits in a tax-neutral vehicle where they can continue to grow, and preferably where additional contributions can be made.”

Hanekom says another option would be to allow people to transfer retirement benefits to a retirement annuity fund where they can make further contributions depending on their circumstances (no compulsion) and are allowed to retire and annuitise when they choose (from 55 onwards).

“What is clear is that the concept of reaching retirement only to sit on the stoep, travel the world or play endless games of golf, no longer resonates with many retirement fund members. Whether you want to continue working for financial reasons, or because you enjoy remaining active, the introduction of phased retirement will make it possible for individuals to postpone their retirement to the day when they actually stop working.”

Hanekom encourages retirement fund members to take ownership of their own retirement planning. “With the assistance of a qualified financial adviser, you should do the math to determine your projected pension. If you do decide you will need to embark on a second career, it is a good idea to find out whether your current employer is likely to retain your services, or whether you may need to reskill yourself to start your own venture or a career in a different field. Planning for your retirement years should not be pushed to the bottom of your priority list until you are close to retirement – you need to use your power now to decide your own future to ensure you have the best possible financial security in retirement,” he concludes.

About Sanlam Employee Benefits (SEB)
Part of the Sanlam Group, SEB specialises in the provision of risk, investment and administration services to institutions and retirement funds. Focused on meeting the unique needs of its diverse clients, SEB assists companies to create and deliver customised employee benefits solutions, including the collection of premiums and communication to fund members. For more information, visit


  • Richard Stephens says:

    Many Pensioners are obliged to leave the Company at the age of 60 for Ladies and 65 for Men. This is a massive waste of expertise, especially after some 40 years with that Company. Their experence and customer contacts are invaluable and they should be allowed to carry on working even if its for a lower position and salary.

  • Jackie Dittberner says:

    The following position is open to a single, healthy and energetic lady between the ages of 45 and 70. (Accommodation is for a single lady)

    THE PEVENSEY PLACE ASSOCIATION (Home for 76 Cerebral Palsy Adults, on farm, near Underberg, KZN) seeks Applicant for the post of House Mother and Supervisor of Housekeeping. Needs good health, (will help with sports activities); fluency in English; experience with children / disabled adults; and be in possession of a Driver’s Licence (will need to drive Combi busses). Salary plus free board and lodging on premises. Applications by 7 August 2014 to: The Director, P/Bag X313, Underberg, 3257. Tel: 087 940 3614; Fax: 086 657 6161; Email:

  • michael says:

    I agree with Richard. When you reach the ”Magic Age” out you go taking all that expertise, global knowledge and mentoring capability. I am 74 healthy,active and lucky to use some of my knowledge to assist a younger friend in export all at home on my laptop, in my time, for some ”pocket money”I could even do this job whilst farm sitting for a friend with wi-fi! My advice is keep your computer skills sharp. There are opportunities out there

    • Marilynh says:

      Michael – I agree.
      Keep those computer skills up to date and relevant as you never know what opportunity could be round the corner. I know of an 84-year old lady who has just become a part-time school librarian – and all because she has relevant computer skills and is prepared to put her hand to anything. She had no library experience, but convinced the powers-that-be that she could learn, and learn she has! Good on you, Daphne!
      Marilyn, YEI Editor

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