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Much as we may be looking forward to the third stage of our lives, retirement brings with it several challenges. 

You’ve Earned It looks at the key challenges and important issues facing retirees in South Africa today.  

We also look at possible solutions to these challenges.


Many retirees-to-be and baby boomers are not retirement-ready.  And we are not talking about finances, although that is a challenge in itself.   Retirement is not just a financial event. It’s a life-changing transition that calls for emotional as well as financial preparation.   You spend your whole life preparing financially for retirement, but one often does not prepare emotionally.

Many soon-to-be retirees have pushed the thought of retirement to the back of their minds, and will sooner plan a month’s holiday as opposed to planning their retirement.  With retirement depression rating as the Number One condition amongst new retirees, we need to acknowledge and understand that retirement planning is critical for a successful retirement. 

Some retirees are just plain lucky – life in retirement falls into place.  For others, it’s a major change in your life, a stressful transition, and a rocky road with lots of detours.  Research shows that retirement is right up there – in the Top Ten of life’s most stressful events. On the “life events scale” used by psychologists to determine stress levels, retirement is rated in the 10 most stressful events you can experience – behind the death of a spouse or a divorce, but ahead of the birth of a baby, or the death of a close friend. 

To kickstart the first in this series of Retirement challenges, let’s look at where the concept of retirement came from, and what is happening with the retirement age, world-wide?

“Retirement” originated in the 1880s.  Retirement was the idea of Chancellor Otto von Bismarck in Germany.  It was a social insurance programme that contributed to the pensions of nonworking older Germans. Initially, 70 was the magic number chosen by Bismarck as the retirement age.  This was changed to 65 sometime after Bismarck died.  In those days, it was simple – if you were alive, you worked!    In fact, Bismarck’s retirement concept was a revolutionary idea – given that life expectancy was around 45!   Although the retirement concept had merit in its day, it is now considered to be an archaic concept that we believe should go the way of the Dodo Bird, i.e. disappear into extinction. 



Many factors have meant that various countries are looking at the retirement age of their citizens.  65 appears to be the average retirement worldwide, with some exceptions. 

In the UK, it has been recommended that the state pension age should be steadily increased over the next four decades to the age of 68 for both men and women. 

Australia appears to be on track to have the oldest pension age in the developed world by the year 2035.  The Australian government is planning to trim the social services bill and has proposed that the pension age be raised to 70 within the next 20 years. 

Similarly in the USA, policymakers are proposing that the retirement age be increased to possibly 70 years of age, for those workers who are currently in their 30s or 40s. 

In South Africa, the Basic Conditions of Employment Act does not prescribe an age at which employees must retire.  So how do we determine when an employee should retire? Is it at 55, 60 or 65?  With no statutory retirement age, and because labour legislation is silent on this issue, it is up to the employer to prescribe the retirement age for its employees.  The accepted norm in this country seems to be that people retire between the ages of 60 and 65.  People over the age of 60 with no other means of financial income qualify for a monthly state pension, otherwise known as The Older Persons Grant.

And this is what is happening world-wide –


Countries currently with the highest retirement age:


Mexico 72 In Mexico, research shows that men work until 72.3 and women until 68.7.  The gender gap in retirement age is common in several countries, but this inequality is gradually being addressed. 
Finland 68 The Finns work until the age of 68 – at this point, the highest age in the world
Denmark and  Greece 67 Denmark and Greece have the same retirement age – 67. 

Greece recently took austerity measures at which time, they raised their retirement age from 65 to 67.


Countries with the lowest retirement age:


Nepal 58 Nepal has the lowest official retirement age in the world!


Many other countries have “60” as their official retirement age

60 Once upon a time, Japan had the lowest retirement age.  However, with their ageing population and declining birthrate, the retirement age was increased from 55 to 60 in 1998.  Japan will be increasing their retirement age every three years, until 2025, when they will reach the mandatory retirement age of 65.


Solutions to the retirement age conondrum

Raising the retirement age to 70-odd in South Africa is a double-edged sword.  While South Africa loses critical and expert skills when people retire, keeping people on beyond 65 compounds South Africa’s severe unemployment rate.  Not raising the retirement age has an impact on the economy as the government struggles with limited resources and a pressured public purse and struggles to support a growing older population.  Currently, approximately 3 million people in South Africa receive the Older Person Grant, and this number is estimated to rise to 7 million by 2030.


Solutions could include:


  • Phased-in retirement – retain key personnel as contractors without benefits, not full-time employees
  • Mentorship programmes in all organisations – where senior employees can coach and transfer their skills, knowledge and experience to the younger generation.
  • People coming up for retirement should be encouraged to study entrepreneurship with the idea of opening their own small businesses, to save more towards their retirement, create employment, keep cash-flow going and stimulate the economy.



We invite you to join the conversation on this topic. 
Please leave your comments in the comment section below.


Relevant articles:


The unique challenges of Retirement: Challenge #2 – Working in retirement

The unique challenges of Retirement: Challenge #3 – Housing

The unique challenges of Retirement: Challenge #4 – Health

Finding your sense of purpose in retirement



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