{"id":643088,"date":"2026-04-30T07:29:42","date_gmt":"2026-04-30T05:29:42","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=643088"},"modified":"2026-04-30T07:29:44","modified_gmt":"2026-04-30T05:29:44","slug":"the-5-financial-mistakes-people-make-when-they-retire","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/industrynews\/643088-the-5-financial-mistakes-people-make-when-they-retire.html","title":{"rendered":"The 5 financial mistakes people make when they retire"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"675\" src=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1-1200x675.jpg\" alt=\"\" class=\"wp-image-643092\" srcset=\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1-1200x675.jpg 1200w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1-600x338.jpg 600w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1-768x432.jpg 768w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1-1536x864.jpg 1536w, https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2026\/04\/1-1600x900-1.jpg 1600w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center has-small-font-size\"><em>Andre Tuck, Senior Retirement Consultant at 10X Investments<\/em><\/p>\n\n\n\n<p>What are the most common areas that negatively affect retirement finances? Senior Retirement Consultant Andre Tuck, who has spoken with thousands of people about their retirement plans over the course of his career, shares five mistakes to avoid.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mistake 1: Choosing the wrong pension product: Living Annuity vs Life Annuity<\/h2>\n\n\n\n<p>When you retire you are obliged by law to use at least two-thirds of your retirement savings to buy an annuity, which will pay you an income in retirement i.e. a pension.<\/p>\n\n\n\n<p>You can choose between two types of annuity: a guaranteed annuity (also known as a life annuity) or a <a href=\"https:\/\/www.10x.co.za\/product\/living-annuity?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>living annuity.<\/strong><\/a> Although the names sound similar, they are fundamentally very different.<\/p>\n\n\n\n<p>With a life annuity, the insurer guarantees you a specified monthly pension for the rest of your life. A life annuity insures you against longevity risk (the risk that you outlive your savings) as well as investment risk (depleting your capital too soon due to inadequate investment returns). Sounds great, right? But that may not necessarily be true for you.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"The uncomfortable truth about retirement in South Africa - Rands &amp; Sense by 10X\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/WJGIO3A3McQ?start=6&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"has-text-align-center has-small-font-size\"><em>The uncomfortable truth about retirement in South Africa &#8211; Rands and Sense by 10X<\/em><\/p>\n\n\n\n<p class=\"has-text-align-left\">With a life annuity, you do not have any control over how your money is invested. Neither can you increase or reduce your monthly income when your expenses change. Plus, your policy dies with you, so no money passes to your heirs. In other words, a life annuity personifies the concept of \u201cliving on a fixed income\u201d.<\/p>\n\n\n\n<p>By contrast, a <a href=\"https:\/\/www.10x.co.za\/product\/living-annuity?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>living annuity<\/strong><\/a> transfers the risk and responsibility for securing an adequate income for life to you. In return, you have greater investment and income flexibility, and your heirs inherit whatever is left of your capital after your death, outside of your estate.<\/p>\n\n\n\n<p>A living annuity requires more active involvement from you, but allows you to adjust what you receive monthly as needed.<\/p>\n\n\n\n<p>Choosing between a living and a life annuity at retirement requires a careful evaluation of your personal needs and circumstances. This is a critical decision that has implications for your income, tax, estate planning and risk. Consider your options carefully before committing.<\/p>\n\n\n\n<p>Don\u2019t let the maths scare you, though. You can use the <a href=\"https:\/\/www.10x.co.za\/calculators\/living-annuity?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>10X Living Annuity Calculator<\/strong><\/a> to understand your options better.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mistake 2: Underestimating your expenses<\/h2>\n\n\n\n<p>Your financial situation is likely to change during retirement. It is very important to keep your budget updated, so that you can respond confidently to sudden expenses or opportunities. A vague plan based on the assumption that you\u2019ll be \u201cspending less money in retirement\u201d simply isn\u2019t good enough.<\/p>\n\n\n\n<p>You need a retirement plan &#8211; and the budget that underlies its assumptions &#8211; that\u2019s workable, realistic and up-to-date. A guesstimate won\u2019t help much, you need to get into the details.<\/p>\n\n\n\n<p><em>At 10X, we\u2019re making our low fees even lower. For the months of April and May 2026, sign up for a preservation fund with 10X and get an ultra-low fee of 0.7% on your preservation fund. <\/em><a href=\"https:\/\/www.10x.co.za\/contact-us?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><em><strong>Speak to a consultant<\/strong><\/em><\/a><em>. <\/em><\/p>\n\n\n\n<p>It\u2019s true that your work travel expenses or bond repayments will likely fade away when you retire. However, your spending will probably increase in other areas, like healthcare, hobbies and leisure travel. Remember to include investment fees as a line item (more about that later).<\/p>\n\n\n\n<p>Create a detailed and realistic budget to help manage your money, instead of allowing it to control you. Consider adding a line item of 10% contingency, so your budget has some leeway in case of sudden changes (like the unexpected fuel cost increases we\u2019re currently experiencing).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mistake 3: Drawing down too much<\/h2>\n\n\n\n<p>If you chose a living annuity, rather than a life annuity, you have some control over your money in retirement, and can leave an inheritance. That flexibility comes with the responsibility to calculate a sustainable drawdown rate (how much you receive every month as income) to ensure you avoid outliving your savings.<\/p>\n\n\n\n<p>You need to look at how long you will need your savings to support you, what your assets are (your asset mix), and the fees you\u2019re paying to make a wise decision about your drawdown rate.<\/p>\n\n\n\n<p>The Rule of 4% is a widely-used approach that says if you withdraw 4% of your retirement savings in your first year and adjust that amount for inflation each year after that, your money should last 30 years or more. <\/p>\n\n\n\n<p>This isn&#8217;t just a number pulled from thin air &#8211; it comes from research done by financial adviser William Bengen in 1994, who analysed decades of market data to find a withdrawal rate that could survive even the worst market conditions.<\/p>\n\n\n\n<p>However there are other ways to decide how much of your savings to draw down every month. It is important to do your research. Financial planning tools, like <a href=\"https:\/\/www.10x.co.za\/calculators?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>10X\u2019s range of calculators<\/strong><\/a>, can help you find your optimal sustainable draw-down rate, based on your estimated life expectancy and other parameters.<\/p>\n\n\n\n<p>Confirm the details with your fund provider, or <a href=\"https:\/\/www.10x.co.za\/contact-us?product=retirement-annuity&amp;utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>speak to<\/strong><\/a> a 10X consultant (for free, no obligations) about choosing the approach that is best for you.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mistake 4: Selling when the market is down<\/h2>\n\n\n\n<p>Investing in growth assets like equities or shares is proven to give you the best chance to grow your wealth. Inevitable periods of market volatility may, however, test your nerves. You might feel the urge to change your asset mix when you see a sudden sharp drop in the value of your portfolio.<\/p>\n\n\n\n<p>If you give in to your emotions and switch when the market is down, you will likely lock in losses and deplete the capital from which you draw an income.<\/p>\n\n\n\n<p>Based on global life expectancy figures (as reported by the World Health Organisation in 2020), individuals who retire at 60 are likely to live another 15 years or more. This means they have time on their hands to ride out bouts of market weakness and recover any losses. But only if they haven\u2019t sold when the market was down.<\/p>\n\n\n\n<p>The trick is to keep your eyes fixed on your long-term horizon and not react to short-term market events.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Mistake 5: Paying high fees<\/h2>\n\n\n\n<p>Few retirees realise that the fees on their living annuity are likely to be their single biggest expense in retirement. Do you know exactly what you are losing to fees?<\/p>\n\n\n\n<p>To illustrate the cost of high fees, let\u2019s assume you draw down 5% from a R4,8 million pension pot. You would receive a pre-tax income of R240,000 a year, or R20,000 per month.<\/p>\n\n\n\n<p>If you\u2019re paying the industry\u2019s average fee of almost 3% a year (typically made up of advice, administration and investment management fees) you would be paying roughly R144,000 a year (R12,000 per month) in fees. That means you\u2019re paying yourself only two-thirds more than your service providers. You\u2019re spending almost 40% of your income on fees!<\/p>\n\n\n\n<p>If you want to check your actual costs, use the 10X <a href=\"https:\/\/www.10x.co.za\/calculators\/effective-annual-cost?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Effective annual cost calculator<\/strong><\/a>. And if you\u2019re unsure about the fees you\u2019re paying, get a free, no-obligation cost comparison <a href=\"https:\/\/www.10x.co.za\/campaign\/cost-comparison?utm_source=MyBroadband&amp;utm_medium=Sponsored+Article&amp;utm_term=April+2026\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>here<\/strong><\/a>.<\/p>\n\n\n\n<p><em>Brought to you by 10X Investments.<\/em><\/p>\n\n\n\n<p><em>**10X Investment is an authorised FSP. The 10X Living Annuity is underwritten by Guardrisk Life Limited. This article is not to be construed as advice.<\/em><\/p>\n\n\n\n<p><em>10X Investments offers a range of investment options directly to the public which can be accessed via the My10X investor portal online<\/em><a href=\"https:\/\/eur01.safelinks.protection.outlook.com\/?url=http%3A%2F%2Fwww.10x.co.za%2F&amp;data=05%7C02%7Ccthomen%4010x.co.za%7C9ae90fedf9bc4919329108dd0fba3828%7C3c82fe9342cf4feb9721cce0fc92aad9%7C0%7C0%7C638684014666876003%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=Mx4Gws0xLT4Vt74EWle1XckGh3omD1Nemo9kOFgiSdc%3D&amp;reserved=0\" target=\"_blank\" rel=\"noreferrer noopener\"><em><strong>www.10x.co.za<\/strong><\/em><\/a><em>, via corporate pension funds as well as via your financial adviser.<\/em><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are the most common areas that negatively affect retirement finances? Senior Retirement Consultant Andre Tuck, who has spoken with thousands of people about their retirement plans over the course of his career, shares five mistakes to avoid.<\/p>\n","protected":false},"author":341030,"featured_media":643091,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28937],"tags":[27413],"class_list":["post-643088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industrynews","tag-10x-investments"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/643088"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341030"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=643088"}],"version-history":[{"count":6,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/643088\/revisions"}],"predecessor-version":[{"id":644432,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/643088\/revisions\/644432"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/643091"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=643088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=643088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=643088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}