Understanding risks in retirement

Retirement is like stepping into a new chapter of life where the pages are filled with relaxation, adventure, and lots of "me time". But, let’s be honest, it can also come with some tricky financial puzzles to solve. Just SA is here to help you tackle those challenges and make sure your retirement is as smooth as possible! 

Here are some tips to help you manage risks and secure your financial future.

Outsmart longevity risk and live your best (long) life

Living a long, healthy life is a blessing, but it also presents the challenge of managing risk that comes with longevity.

Imagine this: You've planned your retirement for the next 20 years, but you end up living longer than you expect. While it's great to have more time to enjoy life, it also means you need to make sure your savings last as long as you do!

Average life expectancy is increasing and we need to be smart about our finances to avoid outliving our savings. Including a guaranteed lifetime income from a life annuity in your retirement income plan will relieve the stress of wondering if your money will last. It can help you to cover your essential expenses every year, no matter how many candles are on your birthday cake!

Navigate investment risk and smooth the roller coaster of returns

Investing can feel like a roller coaster with its ups and downs. While the highs can be exhilarating, the lows can be a bit nerve-wracking. But with the right retirement income product, you can avoid a bumpy ride!

A guaranteed life annuity converts your retirement savings into a regular monthly income that is not affected by market volatility. It’s like having a safety harness. It gives you a secure income, even when the market takes unexpected turns.

There is also an annuity option which balances investment risk and reward. It’s called a blended annuity, and it is a combination of a life annuity and a living annuity, offering both flexibility and security for your retirement finances.  

Beat inflation risk and keep up with rising costs

Inflation is like rust on a car. At first, you might not notice it. But over time it spreads, and before you realise it, the damage is more extensive than you anticipated. Just like rust, inflation can creep up on you, causing significant issues down the line. If you don’t address the problem of inflation early in your retirement income plan, your money might not stretch as far as you thought.

Consider retirement income products that offer inflation protection, such as a with-profit annuity (where annual increases are linked to investment performance) or an inflation-linked life annuity. These types of products aim to keep up with rising costs and help you to maintain the purchasing power of your annual income.

Limit behavioural risk and minimise the impact of emotions

Behavioural risk can simply be spending more than you can afford, and depleting your savings too quickly. Or it can be more of an emotional response.

Picture this: The investment markets take a dip (like they did in early April 2025 in response to US President Trump’s tariff threats). You might panic and disinvest, deciding instead to hide your money under your mattress!

Emotional reactions can lead to decisions that aren’t rational, which could greatly affect your financial outcome and derail your retirement goals. But a life annuity protects you from yourself! It removes the element of behavioural risk and can help you live out your golden years with a higher degree of certainty and comfort.

Planning for a secure and comfortable retirement

Retirement is a time to enjoy the fruits of your labour, but it also requires careful planning and proactive risk management. Speak to a financial adviser about actively managing your retirement risks before it’s too late. Or contact Just SA about our life annuity solutions that help navigate these risks, so you can enjoy a long and prosperous retirement!