THE concept of retirement as it currently exists may have to be replaced by new thinking, given the impact of the Fourth Industrial Revolution, the changing nature of work and people living longer.
Andrew Darfoor, the group chief executive of Alexander Forbes, says thinking about the financial well-being of individuals should extend beyond their formal retirement age, because living longer will mean post-retirement careers for many.
“There is a very real chance that the concept of retirement itself will need to be retired, as we pave the way for the new interconnected world of work. This change is very much a result of the Fourth Industrial Revolution and a number of factors, including individuals living longer, healthier lives, the advancement of technology, and the overall changing nature of work,” Darfoor says.
These present new challenges not only for financial planning, but also for the retirement industry in South Africa, Darfoor says in the foreword to a new book on retirement and financial planning, The Ultimate Guide to Retirement in South Africa, sponsored by Alexander Forbes. The book has been written by former Personal Finance editor Bruce Cameron and Wouter Fourie, South Africa’s Financial Planner of the Year for 2015/16.
Cameron and Fourie note in the book that, in future, retirement savings will have to last for longer. They point out that there are only three solutions to the problem of not having money saved by the time you expect to retire. These are that you must continue to work, reduce your standard of living or rely on the goodwill of others.
Darfoor says that in navigating this complex path, individuals will have to take on more responsibility and ownership in planning for retirement. This will include looking to invest appropriately, with guidance from a trusted financial adviser, and getting value for money on their investments.