05/10/2026
Will Your Retirement Income Last?
One of the most important financial planning questions is also one of the most uncomfortable:
Will my retirement income last?
Most people spend decades building up retirement capital through retirement annuities, pension funds, provident funds, preservation funds, investments, business interests and property. But the real test often begins after retirement — when that capital must start producing a reliable income.
That is where planning becomes critical.
Retirement is not just about reaching a certain age or having a certain amount invested. It is about whether your capital, income needs, investment strategy, drawdown rate, tax position and lifestyle expectations can work together over the next 20, 25 or even 30 years.
Many retirees and pre-retirees underestimate how long retirement can last. Someone retiring at 60 or 65 may still need their money to support them well into their 80s or 90s. That means retirement planning is not a once-off event. It is an ongoing review process.
Markets Move Up and Down — But Long-Term Investors Must Keep Perspective
Markets do not move in a straight line.
The JSE, global markets, commodity prices, interest rates, inflation, politics and currency movements all affect investment values in the short term. Some months are strong. Some months are uncomfortable. Sometimes a portfolio can fall sharply just when a client is about to retire, draw income or make a large withdrawal.
That can be emotionally difficult.
But this is exactly why retirement income planning must be done carefully.
The FTSE/JSE All Share Index has a long history. The index began at 100 points in January 1960 and reached the 100,000-point milestone in July 2025, with the JSE noting annualised returns of over 11% over that 65-year journey. Johannesburg Stock Exchange Current market data also shows that the index still experiences meaningful shorter-term volatility, with a 52-week range of roughly 106,179 to 129,339 and a recent level around 108,576.
JSE ALSI long-term trend: selected index levels
Selected FTSE/JSE All Share Index levels from 1960 to 2026. This is a price-index illustration, not a total-return chart, and it excludes dividends.
030K60K90K120K19601980200020202026
Sources: JSE 100,000-point milestone statement; FT Markets current index data; historical annual index table from FTSE/JSE ALSI public historical records.
The chart makes an important point: short-term declines are normal, but long-term market participation has historically rewarded patient investors.
However, this does not mean every investment is suitable, every portfolio will recover at the same speed, or every retiree can simply “wait it out”. Retirement planning is more complex than that.
The issue is not only market performance.
The issue is whether your retirement income plan can survive volatility.
The Real Retirement Risk: Drawing Too Much at the Wrong Time
One of the biggest dangers in retirement is not simply a market decline. It is drawing income from an investment while the market is down.
This is often called sequence-of-return risk.
In simple terms, it means that the order of returns matters. A poor market early in retirement can be far more damaging than a poor market later in retirement, especially if the retiree is drawing income at the same time.
For example, if a retiree withdraws too much income from a living annuity during a weak market, they may be selling more units at depressed prices. That leaves fewer units invested to participate in a recovery. Over time, this can place pressure on the sustainability of the income.
This is why retirement planning is not just about choosing a fund. It is about managing:
Income level
Asset allocation
Withdrawal strategy
Tax efficiency
Inflation
Longevity
Emergency cash needs
Market volatility
Estate planning
Ongoing annual reviews
A retirement portfolio must balance two competing needs:
1. The need for income now
2. The need for capital growth to support future income
If the portfolio is too conservative, it may not grow enough to keep up with inflation.
If the portfolio is too aggressive, the retiree may experience uncomfortable volatility.
If the drawdown is too high, the capital may reduce too quickly.
If the structure is wrong, the retiree may pay unnecessary tax or lose flexibility.
Retirement Is Not One Product
Many people think retirement planning means having a retirement annuity or a pension fund.
That is only part of the picture.
A proper retirement review may include:
Retirement annuities
Pension funds
Provident funds
Preservation funds
Living annuities
Life annuities
Discretionary investments
Endowments
Tax-free savings accounts
Offshore investments
Cash reserves
Business interests
Property
Life cover
Estate liquidity
Medical aid and gap cover
Wills and beneficiary nominations
The question is not just, “How much do I have?”
The better question is:
“How does everything work together?”
A client may have several retirement products, old policies, investment accounts, offshore holdings and insurance benefits accumulated over many years. These may have been taken out through different advisers, different employers and different providers.
Over time, the portfolio can become fragmented, duplicated, outdated or misunderstood.
That is where a proper retirement review becomes valuable.
What Should a Retirement Review Ask?
A good retirement review should ask practical questions:
How much retirement capital do you have?
How much income do you need each month?
How much income do you want, compared with how much income is sustainable?
What is your realistic retirement time horizon?
Are you drawing too much from your living annuity?
Is your portfolio too aggressive or too conservative?
Are you properly diversified?
Are your investments aligned to your risk profile?
Are your fees reasonable?
Are your beneficiaries up to date?
Do you have enough emergency liquidity?
What happens if markets fall by 10%, 20% or more?
What is your tax position?
Will your spouse or dependants be protected?
Is your estate plan aligned with your retirement plan?
These are not theoretical questions. They affect real people, real families and real retirement outcomes.
The Problem with Emotional Decisions
When markets fall, many investors want to “move to cash”.
Sometimes reducing risk is appropriate. But making a major change after a market decline can be dangerous.
If you move everything to cash after a fall, you may lock in the decline and miss the recovery. If you withdraw too much during a downturn, you may permanently weaken your retirement plan. If you chase last year’s best-performing fund, you may end up buying yesterday’s winner at exactly the wrong time.
Retirement planning requires discipline.
The question should not be:
“What did the market do this month?”
The better question is:
“Is my retirement income plan still suitable for the next stage of my life?”
Income Planning Must Be Reviewed Regularly
A living annuity or retirement income strategy should not be left on autopilot.
It should be reviewed at least annually, and more often when there are major changes such as:
Retirement
Death of a spouse
Divorce
Market correction
Large withdrawal
Medical event
Change in income needs
Sale of a business
Inheritance
Change in tax position
Estate planning changes
A retirement income plan that was suitable five years ago may not still be suitable today.
Your needs change. Markets change. Tax rules change. Medical costs change. Family circumstances change. Inflation changes. Your ability to tolerate risk also changes.
That is why review-driven advice matters.
The Role of Growth Assets in Retirement
Many retirees believe that once they retire, they should avoid growth assets completely.
That is not always correct.
A retiree may still need exposure to growth assets because retirement can last decades. Inflation quietly erodes purchasing power over time. What costs R30,000 per month today may cost far more in 10 or 20 years.
If a portfolio becomes too conservative too early, it may feel safer in the short term but may fail to provide enough real growth over the long term.
The challenge is to find the right balance between:
Capital preservation
Income stability
Inflation protection
Long-term growth
Liquidity
Risk management
That balance is different for every client.
Why Drawdown Rates Matter
The drawdown rate on a living annuity is one of the most important retirement decisions.
If the drawdown is too high, the investment may not last.
If the drawdown is too low, the retiree may unnecessarily restrict their lifestyle.
The correct drawdown depends on factors such as age, health, investment value, income needs, spouse’s needs, investment strategy, market conditions and other sources of income.
A sustainable retirement plan is not just about choosing the maximum income allowed. It is about choosing an income level that gives the retiree a realistic chance of maintaining income for life.
Business Owners Need Special Attention
Business owners often face an additional challenge.
Many business owners spend years reinvesting in the business and neglecting their personal retirement planning. They may assume the business will fund retirement one day.
Sometimes that works.
Often, it does not work as cleanly as expected.
The business may not sell at the expected value. The sale may take longer than planned. The business may depend too heavily on the owner. There may be succession issues, tax implications, loan accounts, shareholder agreements, key person risks or estate liquidity problems.
For business owners, retirement planning must include both personal wealth and business continuity.
The Real Question
The question is not simply:
“Will the market recover?”
Historically, broad markets have recovered from many difficult periods and moved higher over time. But each client still needs a plan that can survive the journey.
The real question is:
“Can my retirement income plan withstand market volatility, inflation, tax, medical costs and the risk of living longer than expected?”
That is a much better question.
When Should You Review Your Retirement Plan?
You should consider a retirement review if:
You are within 10 years of retirement
You are about to retire
You have a living annuity
You are drawing income from investments
You are worried about market volatility
Your income needs have changed
You have multiple old retirement products
You are unsure whether your drawdown is sustainable
You want to consolidate or simplify your investments
You have not reviewed your retirement plan in the last year
You are a business owner relying on the sale of your business
You are concerned about your spouse’s financial security
Final Thought
Retirement planning is not about predicting the market.
It is about building a plan that can handle uncertainty.
Markets will rise and fall. Interest rates will change. Inflation will move. Politics will create noise. Currencies will fluctuate. Investors will feel anxious at times.
But a properly structured retirement plan gives you a better chance of staying disciplined, drawing income sensibly and keeping your long-term objectives in focus.
Will your retirement income last?
That question deserves a proper review.
A professional retirement review can help you assess whether your investments, annuities and drawdown strategy are still aligned with your long-term needs.
I help clients review retirement annuities, preservation funds, living annuities and investment portfolios.
