Stienemarié Bonsma-Potgieter, CFP®

Realising that you are behind on retirement savings can feel overwhelming. You may look at the years that have passed and wonder whether there is still enough time to build a secure future. Some people avoid the subject, while others take unnecessary risks in the hope of catching up quickly. A better approach starts with a clear assessment and a practical plan.

A late start may require higher contributions, a longer working life or some adjustment to your retirement expectations. It still leaves you with options, and the decisions you make now can improve the outcome.

Start with the facts

Begin by understanding where you stand. List your retirement funds, retirement and other long-term investments. Include benefits from previous employers, which can easily be forgotten after changing jobs.

Ask your financial planner to estimate the income these assets may provide at retirement and compare this with the income you are likely to need. The difference becomes the starting point for your plan. A vague concern that you are behind is difficult to act on, while a calculated shortfall allows you to consider specific solutions.

Increase your contributions

When you start later, your money has fewer years to benefit from compound growth. You will usually need to save a larger portion of your income to make up some of the difference.

Increase your monthly contribution by an amount that is meaningful and sustainable, and review it each year. Salary increases, bonuses and additional income can also be directed towards retirement rather than being absorbed into everyday spending.

Retirement contributions may offer tax benefits, depending on the rules and limits that apply to your circumstances. The tax benefit can help, but the main goal remains building enough capital to support your retirement whilst still allowing flexibility as well.

Protect the savings you already have

Catching up becomes much harder when retirement money is withdrawn every time you change jobs or face an unexpected expense. Preserve existing retirement benefits wherever possible and consider the long-term effect before accessing them.

Part of your retirement savings may be available under the two-pot retirement system, but withdrawals should be treated with care. Every withdrawal reduces the amount left to grow for retirement and may also have tax consequences.

A separate emergency fund can help prevent retirement savings from becoming your first solution when something goes wrong. Your retirement fund should remain focused on its main purpose, which is to help replace your salary later in life.

Review your investment strategy

Feeling behind can tempt you to choose the most aggressive investment available. This may expose you to losses you do not understand and may not have enough time to recover from.

Your investment strategy should reflect your investment term, your ability to tolerate market movements and the level of risk needed to meet your goal. Being too cautious can also hold you back, as money kept mainly in cash may struggle to grow faster than inflation over time.

A diversified portfolio that is matched to a clear financial plan is more useful than chasing short-term performance or the previous year’s best-performing investment.

Review your future spending

Retirement planning depends on how much you accumulate and how much income you will need. Consider the lifestyle you are planning to fund, including housing, healthcare, transport, family support, travel and debt.

Reducing your expected retirement expenses can lower the amount of capital you need. Paying off expensive debt before retirement may also ease pressure on your future budget. This does not mean giving up every enjoyable goal. It means deciding which expenses matter most and planning for them realistically.

A clear view of your future lifestyle gives you a more useful savings target and helps you identify where adjustments may be needed.

Consider working for longer

Retiring later can improve your position in several ways. You gain more years to contribute, your investments remain untouched for longer and your savings need to support you for fewer years.

Working longer does not always mean staying in the same full-time role. It may involve consulting, part-time work, a small business or a gradual move into retirement. Health and employment circumstances can change, so this option should support your plan rather than become its only solution.

Protect the plan

Illness, disability or death can disrupt even a disciplined retirement strategy. Review your life cover, disability protection and income protection, and make sure your will is valid and your beneficiary nominations are up to date.

Focus on what you can do now

You cannot go back in time to catch up on missed contributions, and it also is not helpful to wallow in regret, but you can decide what happens to your next salary, bonus and annual increase.

Set a realistic contribution target and review it at least once a year. Track whether your projected retirement income is improving and adjust the plan when your circumstances change.

Starting late means that each decision carries more weight, but consistent action can still make a meaningful difference. The first step is to face the numbers and then build a plan around the years and resources you still have.

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