Investment strategies for retirement at 80 and beyond

When I first heard that the real average retirement age in South Africa is 80, I wasn’t surprised. Most members retire with just 20% to 30% of their final income. That’s not enough. And so, many stay in the workforce, not out of choice, but necessity.

What struck me was the value of putting a number to it. “Eighty” is no longer an abstract idea; it’s a wake-up call. It brings urgency to the way we talk about retirement, and it sharpens our sense of responsibility as professionals guiding people towards better financial outcomes.

Over 50% of umbrella funds surveyed in the 2025 Sanlam Benchmark survey said they did not think normal retirement age is a reasonable age for members to build up enough savings over their working lifetime to maintain their current standard of living in retirement. A further 39% indicated that normal retirement age would only be a reasonable age if members have high enough contribution rates.

I believe this moment demands realistic optimism. Yes, the challenges are significant – low savings, inequality, affordability, and delayed retirement. But we also have powerful tools at our disposal: thoughtful investment strategy, evolving systems, and better financial education. If we use them wisely, we can help South Africans retire with more confidence – even if it happens later than originally planned.

The evolution of investment

As investment professionals, we’re responsible for delivering strong long-term returns within acceptable levels of risk. In a context where increasing contributions isn't always possible, the performance of the underlying investment becomes critical.

Investment strategies have come a long way. Decades ago, everyone was invested in one pool, regardless of age or life stage. Today, we know that younger members – those further from retirement – can take on more risk. That’s why these members’ retirement savings need to have a high allocation to growth assets like equities, which may be volatile in the short term but tend to perform well over time. The key is time in the market, not timing the market.

For members closer to retirement, the risks are different. A sharp market dip just before retirement could significantly reduce their income. That’s why we de-risk gradually – shifting to more conservative portfolios that protect what members have built. This life-stage strategy allows us to align each member’s investment portfolio with their specific time horizon and need for stability.

Adapting to longer working lives

We also recognise that age alone isn’t the only consideration. People go through different life events – marriage, having children, career breaks- that shape their financial journey. That’s why we offer members the flexibility to tailor their investment strategies, especially with the help of a financial adviser who can look at the full picture.

As people live and work longer, investment strategies must continue to evolve. What happens is, if you defer retirement, you accumulate more money. That makes sense. You contribute for longer, and when you buy an income in retirement – say, through an annuity – it’s cheaper because insurers expect to pay out over fewer years. The longer you wait, the better the financial outlook, if managed correctly.

That’s why many members who plan to retire beyond the traditional 60 to 65 range don’t need to de-risk early. Instead, we align strategy with their actual retirement expectations – extending their growth horizon and helping them build larger pots. It's a powerful adjustment in a time when retirement dates are becoming more fluid. For example, the UK is on track to increase its retirement age to 68 by 2044.

Investing with impact

Longer investment horizons also open the door to investing in longer-term, less liquid assets – like infrastructure, renewable energy, or private debt. These assets aren’t easily traded, but they deliver inflation-beating returns over time and contribute meaningfully to economic development. They create jobs, build communities, and strengthen the economy.

When members remain invested for longer, we can increase our exposure to these kinds of assets, generating both financial and social returns. In this way, retirement investing becomes a force for transformation. It doesn’t just benefit the individual; it supports the country too.

Of course, even the best-designed strategy means little if people don’t understand it. That’s why financial education has become such a core part of our mission. We’re now far more intentional about the conversations we’re having.

“If you don’t save enough, or if you don’t start saving early, this is what’s going to happen.” These aren’t scare tactics; they’re honest, practical conversations at critical life junctures. And they matter.

South Africa has long struggled with building a savings culture, largely due to affordability. Retirement funds can help shift that, especially in conjunction with the Two-Pot system. Because saving through payroll is automatic, retirement funds already remove a key barrier. Now, with the Two-Pot reform, members can access a portion of their savings for emergencies, while the rest remains preserved for retirement. This flexibility makes saving feel more relevant and achievable. In the UK, similar pilots showed that giving limited access to retirement savings actually encouraged higher overall saving. With the right education and communication, this system could make retirement funds a central, trusted part of how more South Africans build financial resilience, both now and for the future.

I believe in realistic optimism. The challenges are real, but so are the solutions. We have strong investment frameworks. We have evolving systems like Two-Pot. And we’re sharpening how we engage and educate members.

Retirement at 80 reflects where we are today, but it doesn’t have to define where we end up. With the right strategy, the right mindset, and the right support, South Africans can still retire with confidence. Because retirement should be a milestone, not a moving target.

* Tsie is the head of investment strategy at Sanlam Corporate Investments.

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