Sanlam report reveals South Africans plan for retirement too late.
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The 45th Sanlam Benchmark Survey has found that South African pensioners who take a cash lump sum at retirement on average deplete the money within a year and two months, mostly because many start planning for retirement in their mid-30s.
Sanlam Benchmark Survey is an annual retirement fund industry research. The report shares insights on employee benefits, healthcare trends, and the financial behaviours of South Africans to help funds and employers improve retirement outcomes.
For 2026, the report found that respondents believe their mid-30s are the right time to begin planning for retirement. The survey also shows that, on average, retirement fund members only start engaging with their retirement fund 3.4 years prior to stopping work.
Retirement confidence is built over decades
Kanyisa Mkhize, chief executive officer of Sanlam Corporate, highlighted that retirement confidence is not built in the final years before retirement. It is built over decades of a working lifetime through the decisions people make along the way: preserving their savings when they change jobs, increasing contributions where possible and managing debt.
“Retirement planning also does not stop when someone leaves work. The first few years after retirement are critical, because that is when a lifetime of savings is tested against the reality of living costs, healthcare needs and longevity,” she said.
“The Sanlam Benchmark tells us that people understand when they should start planning, but the reality is that many are making retirement decisions in a very difficult economic environment. As an industry, we must recognise the financial pressure many members are under.”
The reality before retirement… and after
The report found that before retirement, respondents said they are still trying to build financial security while navigating job moves, rising living costs and growing debt.
After retirement, decisions made early in a career, and along its lifespan, become impossible to undo.
A concerning finding of the report is that many respondents spend the retirement funds they built over two decades in just a year and two months.
“Pensioners who take a cash lump sum at retirement now deplete it within an average of just 14.6 months – a decline from the 30 months reported between 2011 and 2016,” read the report.
“Within four to five years of retiring, half can no longer maintain their pre-retirement standard of living, one in three experience financial strain and 47% carry debt into retirement.”
Healthcare no longer remains a priority
The report revealed that many retirees downgrade their medical aid cover or abandon healthcare cover entirely and rely on the state, while only 33% remain on the same level of private medical cover.
On an optimistic level, the report found that younger South Africans are becoming increasingly conservative in their financial outlook.
“Nearly nine in 10 say they would rather have guaranteed retirement income than potentially higher investment returns,” the report read.
“At the same time, many are navigating career interruptions, debt and short-term financial pressure that make long-term saving difficult.”
Generation X in financial crisis
The report found that Generation X (ages 46 to 61) are carrying some of the country’s greatest financial strain, despite being in their peak earning years.
Many are supporting both children and aging parents while approaching retirement themselves, often with significant debt.
Meanwhile, retirement itself is being redefined. The report highlighted that 60% of their respondents in this age group supplement their retirement income through other sources (compared to 47% in 2024), while more than 90% regularly use digital platforms and online banking.
“The old assumptions about age no longer hold,” said Mkhize. “Young people are looking for certainty, people in mid-life are under unprecedented financial pressure, and many retirees continue working because they need to. Retirement planning has to reflect the way South Africans actually live today, not the way they lived 20 years ago.”
