Rethinking Retirement: Why 60 Might Be Too Soon

A comfortable retirement isn’t about timing the clock – it’s about timing your plan.

For generations, 60 was seen as the “golden age” of retirement, a milestone marking the end of early mornings and endless meetings. Yet, in today’s world, retiring at 60 can sometimes feel less like a finish line and more like a financial fork in the road.

With people living longer, markets shifting, and the cost of living steadily climbing, the question isn’t just when to retire, but how to do it without compromising your future self.

The Hidden Cost of Retiring Too Soon

It’s not uncommon for clients to say, “I’ve earned this, I just want to enjoy my time.” And they’re absolutely right to feel that way. The challenge, however, is that retirement today lasts much longer than it used to. Many South Africans can expect to spend 25 to 30 years in retirement, which is almost a third of their lives.

Retiring at 60 means your savings need to stretch much further, and they’ll be working without the benefit of additional contributions or compounding growth. A few extra years of patience can dramatically shift the outcome.

A well-known local study found that delaying retirement by just five years can increase your pension income by up to 80%. This comes down to four simple dynamics:

• You keep earning and saving.
• Your investments continue to grow.
• You shorten the number of years you’ll need to live off your capital.
• And, perhaps most importantly, you allow your assets more time to compound — the quiet engine of long-term wealth.

When those factors combine, the financial difference between retiring at 60 and 65 can be transformative.

A Realistic Look at the Numbers

Imagine two individuals with identical portfolios:

• Person A retires at 60 with R3.5 million in savings.
• Person B works until 65, allowing that same portfolio to grow to R5.5 million.

Not only does Person B start with a stronger foundation, but their money also needs to sustain them for fewer years. The outcome? A higher, more stable income and greater resilience against inflation or unexpected expenses.

It’s a practical illustration of how time, not timing, builds financial comfort.

The Retirement Myth: “I’ll Need Less Money”

One of the most common misconceptions we see is the idea that expenses naturally decline in retirement. The truth? They often don’t.

Between travel, hobbies, healthcare, supporting family members, and maintaining a familiar standard of living, retirement can cost just as much — sometimes more — than your working years.

At mCubed, our advisers often help clients identify these hidden or underestimated costs. The most frequent assumptions we help unpack include:

• “I’ll spend less because I’ll slow down.”
• “I can always downsize if I need to.”
• “My medical costs won’t increase that much.”
• “I’ll make adjustments later.”

The challenge with “later” is that it usually arrives sooner than expected. Without a tested, forward-looking plan, retirees can find themselves tightening budgets within a few short years.

Why Waiting a Little Longer Can Pay Off

If you’re in your late 50s or early 60s, postponing retirement doesn’t mean postponing life. It could simply mean re-framing these years as your financial runway, time to clear debt, fine-tune estate planning, or rebalance your investment mix for sustainable income.

Even two or three additional working years can:

• Reduce the drawdown rate on your savings.
• Increase your monthly retirement income.
• Provide breathing room to plan with intent, not urgency.

And if you’re facing a voluntary package or early-retirement offer, an adviser can model different scenarios so you understand the long-term trade-offs before making a final decision.

Already Retired? You Still Have Levers to Pull

If you’ve already stepped into retirement, you’re not out of options. A thoughtful review of your withdrawal strategy, annuity structure, and healthcare planning can still help extend the life of your portfolio.

Small, informed adjustments, from managing investment risk to re-evaluating lifestyle spending, can make a meaningful difference to both peace of mind and financial endurance.

The mCubed Perspective

Retirement isn’t an event; it’s a long-term financial phase that needs as much planning as any other stage of life. The decision to retire early should never be based on emotion alone — it should be tested against real numbers, realistic lifespans, and evolving economic conditions.

At mCubed, our advisers work with clients to model those scenarios in advance, ensuring your decision aligns with your goals and lifestyle expectations, not just for today, but for the decades to come.