Retirement 101: What you need to know for 2026 and beyond
By Suzean Haumann *
Will 2026 be the year you retire? Or is it the year you finally take your retirement planning seriously? Either way, now is the ideal moment to take stock.
Too many South Africans go into retirement without a real plan. All too often, they rely more on guesswork, outdated assumptions, or blind hope. But retirement is no longer a single event, it’s a phase that for many of us could last 20, 30 or even 40 years.
How confident are you that your plan will deliver a large enough nest egg to last that long? Rather than guessing, I want to encourage you to start taking a more active interest in your future plans. It’s easy to hope for the best or find a way to cope with the situation in the future.
But it doesn’t have to be that way. And, honestly, it’s not difficult. I promise. Here are my tips that I hope will give you the tools and confidence to make a plan, and stick to it.
Start with a budget – and be honest about your lifestyle
One of the biggest mistakes I’ve seen from recent retirees is spending too much too soon. Sticking to a budget in retirement isn’t a leash around your spending, its liberating. Because it gives you the confidence and peace of mind that your money will last.
Start by estimating your monthly income needs. The general rule is that you’ll need about 70% of your pre-retirement income. But that depends on your lifestyle, debt, medical needs and other personal factors.
This table shows you roughly how much capital you’ll need if you want it to last 30 years and you aim to draw 5% of your capital balance per year. Note that these are estimates – not guarantees.
Without a plan, you’ll be flying blind
These figures might be a shock or a wake-up call for many. And that’s a good thing: because if you know what you need to aim for, you can start planning how to get there.
Financial planning isn’t about sticking your head in the sand. It’s about facing up to the reality that you can’t work forever and you have to plan for those years. The good news is you don’t need to do this on your own.
I spend a great deal of my time working with clients to either create their plan, or refine an existing plan to adapt to change.
We focus on:
Setting realistic retirement goals
Calculating how much capital you need
Deciding when to retire
Planning how long your money must last
Considering tax, estate planning, and medical cover
This clear framework allows you to move ahead with your life, without constantly worrying about your future. Your plan might not be perfect, and you’ll probably adapt it over time, but it gives you a solid base so you can make better decisions.
What to choose: life annuity vs living annuity
When you retire, by law, you have to invest at least two-thirds of your retirement savings in an annuity. But which type?
Living annuity:
Offers flexibility: you choose your income drawdown (between 2.5% and 17.5%)
Any remaining capital goes to your heirs
Risk: you could outlive your capital if drawdowns are too high or markets underperform
Life (or guaranteed) annuity:
Pays you a fixed, guaranteed income for life
No capital is left for beneficiaries
Ideal if you’re looking for peace of mind and income certainty
Which is better? It depends. If you want flexibility and the potential to leave a legacy, a living annuity may suit you. If you value predictability and don’t want to worry about market performance, a life annuity could be a better fit.
You can also combine both for a balanced strategy – known as a hybrid annuity.
Avoiding common pitfalls
Even with a decent plan, many retirees fall into these traps:
Withdrawing too much: Drawing 8% may feel tempting, but it has its disadvantages. Take a look at the impact if you draw more than the 5% used in the earlier example in which your capital would last 30 years.
Avoiding risk completely: Going too conservative might feel safe, but it can leave your money shrinking in real terms. That is why it still makes sense to hold some growth assets like listed stocks in your retirement portfolio to combat inflation.
Failing to get advice: Retirement isn’t something you should navigate alone. A good financial planner helps you project income, manage tax, and make smarter decisions with your capital.
You only retire once. Make it count.
Think of retirement planning as designing your ideal lifestyle – with a solid financial engine behind it. There’s no one-size-fits-all strategy, but there is a common thread: you need a clear plan, the discipline to stick to it, and solid advice.
If you’re retiring this year, or just want to check if you’re still on track, now is the perfect time to book a review with a Brenthurst advisor.
Don’t leave your future to chance. Take control. Start 2026 with a retirement plan you can trust.
*Suzean Haumann, CFP®, is head of Brenthurst Wealth Tyger Valley suzean@brenthurstwealth.co.za