{"id":8534,"date":"2026-06-22T09:07:40","date_gmt":"2026-06-22T09:07:40","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=8534"},"modified":"2026-06-22T09:07:40","modified_gmt":"2026-06-22T09:07:40","slug":"what-no-one-tells-you-about-retirement-expenses","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=8534","title":{"rendered":"What no one tells you about retirement expenses"},"content":{"rendered":"<p><\/p>\n<div>\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1688053?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>SIMON BROWN:<\/strong> I\u2019m chatting now with Andre Tuck, senior investment consultant at 10x Investments. Andre, I appreciate the early morning time.<\/p>\n<p>I\u2019m thinking around retirement and the fact that the vast majority of South Africans, 90%-odd, are going to struggle in their retirement. In a recent note that you put out, you talk about it seldom being a single big decision that makes an impact on our retirement.<\/p>\n<p>It\u2019s actually a lot of smaller decisions that we make along the way \u2013 and when we get to retirement.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> That is correct. Morning, Simon. The challenge is rarely a single decision, as you\u2019ve just alluded to. It\u2019s often a combination of insufficient savings, high fees, unrealistic retirement expectations, poor drawdown decisions that compound over time \u2013 and also the cost of living in retirement that plays a crucial role.<\/p>\n<p><strong>SIMON BROWN:<\/strong> There are some big decisions when we get to retirement. Perhaps one of the biggest decisions we have to make is around that living versus guaranteed annuity. The one guaranteed is essentially an insurance product. It\u2019ll pay us out according to the Ts&amp;Cs. The \u2018living\u2019 one is an investment product. These are irreversible decisions that we need to make.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> Definitely correct. The life annuity is a guaranteed income for life. The insurer carries the investment in longevity risk, but you do not have flexibility.<\/p>\n<p>The living annuity gives you money invested and gives you control. It\u2019s allocated, and obviously you\u2019ve got the flexibility of the drawdown between 2.5% and 17.5% per annum, which you can change once a year.<\/p>\n<p>Read: Choosing between living and life annuities: What every retiree should know<\/p>\n<p>But there is also a downside to that. If you draw too much too soon or your investments underperform, and if there\u2019s a sideways or downturn in markets in the early years, that will have a negative impact.<\/p>\n<p>Many people make the call based on what works right now \u2013 a higher initial income or the appeal of flexibility \u2013 without considering what that decision might mean later in life.<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes, I get your point on that, absolutely. It\u2019s thinking around to the point of hitting retirement. We\u2019re potentially living, I don\u2019t know what, 20 or 30 years [more]. This isn\u2019t a couple of rounds of golf and it\u2019s all done. Drawdown rates also matter.<\/p>\n<p>It might be attractive to push it higher, particularly when we\u2019re early into retirement. We want to go and do all those things we couldn\u2019t do [before]. There are holidays and all that sort of stuff, but it is also [important] to be careful to try to keep a drawdown around 5%.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> Definitely. There are studies based in the US, but we also need to factor in what\u2019s applicable to the South African market and South African context specifically.<\/p>\n<blockquote>\n<p>So we\u2019ve seen a lot of advisors now sticking to the 4% rule; if we draw too much early on, that can come back to haunt you later.<\/p>\n<\/blockquote>\n<p>That discussion is a very hard discussion to have \u2013 5% or 4%, or less. Many clients do take this very, very seriously and do that. The ones that don\u2019t find it comes back to bite them.<\/p>\n<p>Read:<br \/>Your medical aid increases at 9% a year \u2013 your retirement fund probably doesn\u2019t<br \/>The terrifying math of funding a 25-year retirement<br \/>From accumulation to drawdown: the quiet psychological shift of retirement<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes. You made a point in the article you wrote that we always think that retirement is going to be cheaper. In some ways it is. Firstly, I\u2019m not saving for retirement anymore, so there\u2019s that saving.<\/p>\n<p>But there are other costs. I mentioned we want to have fun. Eventually there are healthcare costs. Healthcare later in life is going to be a huge burden on your potential savings.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> Definitely. There\u2019s an assumption that your costs are lower in retirement. It\u2019s one of the most damaging myths in financial planning. We\u2019ve seen that non-communicable diseases in healthcare costs increase with age.<\/p>\n<p>There are three stages. The early years of retirement tend to be the most expensive. You travel, spend money on leisure, lifestyle. And then there\u2019s a quieter middle period. And in the end there is a sharp and often unexpected rise in care-related healthcare issues.<\/p>\n<p>If you retire from 60, 63, 65 already, you need to plan accordingly.<\/p>\n<p>Read:<br \/>Retirement is no longer an age \u2013 it\u2019s a phase: Planning for multi-stage retirements in SA<br \/>The first five years of retirement can decide your income for decades<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes it is so. There are actually different stages in it. You mentioned upfront fees. We understand fees when we are investing and saving for retirement. Fees matter. Fees still matter in retirement, particularly.<\/p>\n<p>In a guaranteed annuity it\u2019s a different kettle of fish, but in a living annuity there are fees and those fees are still hugely important.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> Definitely. Fees are the silent killer of wealth. They\u2019re also the most underestimated variable in this whole retirement planning process, because they are the most difficult to see clearly because they\u2019re so layered.<\/p>\n<p>Few understand the full impact of cost on product and platform and financial advisor. The fees are not always visible on your statements, which is exactly why they do so much damage over time.<\/p>\n<p>So one needs to ask for that EAC, the effective annual cost, from your financial planner when you go into retirement on your living annuity \u2013 what the layers of cost are \u2013 so that you clearly understand them from day one.<\/p>\n<p>Read: Retirement income: Let\u2019s talk about fees<\/p>\n<p><strong>SIMON BROWN:<\/strong> That EAC, the effective annual cost \u2013 that is apples with apples. Everyone\u2019s going to come back with the same bundle of fees. The numbers will be different, but what\u2019s included enables us to give a good comparison. And that\u2019s the key point of that EAC.<\/p>\n<p><strong>ANDRE TUCK:<\/strong> That\u2019s 100% correct, 100%. I think it\u2019s very important that one scrutinises and asks that very, very important question. Too many times I\u2019ve seen that a client comes back three, five six months later.<\/p>\n<p>\u2018I didn\u2019t understand there was initial financial advice fee that came off my investment, but now it\u2019s already been done.\u2019 So you\u2019ve got to ask those questions, ask the questions, the hard questions, and then you have peace of mind if you understand them.<\/p>\n<p><strong>SIMON BROWN:<\/strong> Yes. And it comes back to the point you made earlier. There are a lot of big decisions to be made here. We need to make them smartly. We need to make them smart the first time, and ask the questions. If you\u2019re not sure, ask and then ask and ask until it does start to make sense.<\/p>\n<p>Read: Fees a principal destroyer of building wealth<\/p>\n<p>We\u2019ll leave it there. Andre Tuck, senior investment consultant at 10x Investments, appreciate the early morning.<\/p>\n<\/p><\/div>\n<p>#tells #retirement #expenses<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this podcast on iono.fm here. SIMON BROWN: I\u2019m chatting now with Andre Tuck, senior investment consultant at 10x Investments. Andre, I appreciate the early morning&hellip; <\/p>\n","protected":false},"author":1,"featured_media":8535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[6806,208,4597],"class_list":["post-8534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-expenses","tag-retirement","tag-tells"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/8534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8534"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/8534\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/8535"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}