Professionals nearing retirement are being pushed out of the workforce earlier than they planned. Jobs are fewer, the competition is fierce – often from younger candidates – long service, or loyalty, no longer guarantees job security.
For many South Africans, things are getting harder. Take-home pay has gone backwards in real terms. The latest PayInc Net Salary Index, which tracks the net salaries of about 2.1 million earners, shows the average nominal salary declining to R21,228 in April 2026, down 0.6% from March and 0.5% lower than a year earlier. Strip out inflation and the picture is even worse: real take-home pay fell 2.7% over the year to R20,244, which is the lowest level in two years.
Fuel price spikes in April and May drove much of the squeeze, pushing headline inflation to 4% in April, its highest since August 2024. The strain goes beyond prices. Unemployment climbed to 32.7% in the first quarter, shows StatsSA’s Q1 Quarterly Labour Force Survey, with employment dropping by 345,000.
Even those who have won above-inflation raises are watching employers trim bonuses and benefits to reduce costs. This aligns with data from the Mercer Total Remuneration Survey, which shows a growing corporate trend towards “total rewards optimisation”, where companies under intense margin pressure restructure their compensation mix by reducing variable bonuses and peripheral allowances to fund necessary baseline salary increases.
The situation is compounded by the insecurity of retirement. The National Treasury has warned for years that too few South Africans save enough to maintain their standard of living in retirement, which is one reason it introduced reforms such as the two-pot system to encourage households to save more.
But since the two-pot system launched in September 2024, South Africans have pulled more than R43 billion out of their retirement savings, SARS data shows, much of it to meet immediate financial needs. For a household under strain, that access can be the right call, covering debt or essential costs that can’t wait. The trade-off is that money taken out today stops compounding, so it won’t be there to help fund the 20 or 30 years a retirement may need to cover.
In behavioural finance, this is driven by what neuroscientists call an “amygdala hijack” – a survival mechanism where the brain treats modern financial stress like an immediate physical emergency. When faced with high fuel prices, debt, insecure employment or a squeezed salary, our threat-detection centre bypasses the rational prefrontal cortex. It triggers an instinctive impulse to make the immediate discomfort stop today, even if the only available lever means raiding tomorrow’s wealth, reports ReachLink, a behavioural health platform.
This same instinct explains why people panic-sell when the stock market has a bad run. Watching a portfolio shrink on a screen triggers the identical survival response: the urge to flee to cash to make the anxiety go away. It provides a brief, false sense of safety, but selling in a downturn turns a paper loss into a permanent one.
Historically, every major market shock has been followed by a sharp recovery. Those who stayed put recovered with the market; those who divested locked in their losses. A retirement annuity or living annuity is a long-game vehicle, and short-term noise should never dictate long-term strategy.
Since ordinary people have little control of global markets, inflation, or the currency, shifting nervous energy towards the things you can actually influence tends to be more useful than watching the news.
A common starting point among financial planners is putting a number to it. Retirement anxiety feeds on a vague sense that it won’t be enough. Rough guide: to draw 5% a year from a living annuity, you need a pot worth about 20 times the annual income you want. So R40,000 a month in today’s money will be roughly somewhere near R9 million to R10 million. What you’ll actually need depends on investment returns, inflation, how long you live, tax and your own circumstances.
With salary growth constrained by corporate cost-cutting, investment costs are one area where savers do have direct influence. A single percentage point difference in annual fees can erode final retirement wealth by 20% or more over 25 years. Your provider must give you a single, all-inclusive number: the Effective Annual Cost (EAC). Planners generally flag that combined fund, platform, and advisory fees above 1.5% as worth scrutinising.
A shortfall in the numbers doesn’t necessarily mean saving more. Working two or three years longer lets capital compound for longer while cutting the number of years it has to fund. Some retirement fund modelling suggests retiring at 65 rather than 62 could lift the final position by around 15% to 20%. Depending on individual circumstances, options may include delaying retirement, reviewing spending patterns, considering housing decisions or adjusting retirement income levels.
The planning horizon matters too. StatsSA puts life expectancy close to 70 for women and 64 for men, but anyone reaching 60 in good health can plan for decades more, so a pot built for 20 years may now need to last 30.
Anxiety, planners say, is just a signal that it’s time to review a strategy.