Retiring later can have a far bigger effect on your pension than trying to achieve a small increase in your investment returns, Michael Prinsloo, the head of consulting at Alexander Forbes, says.
Prinsloo told trustees attending presentations on the company’s latest Benefits Barometer research that increasing longevity has resulted in employers and governments around the world reconsidering the age at which we should retire.
John Anderson, the managing director of research and product development at Alexander Forbes, says employers in industries where most employees are living longer are responding by increasing the retirement age from 60 to 63 or 65, but other industries, such as mining, where life expectancy is still low are less inclined to increase the retirement age.
Kobus Hanekom, the head of strategy, governance and compliance at Simeka Consultants & Actuaries, says research shows that retirement ages set by funds are still slowly decreasing.
He says the recent Sanlam Benchmark Survey of retirement funds showed a 2.5-percent decrease in the average normal retirement age set by fund for new employees. Just under 30 percent of new employees are required to retire at age 60 and just over 45 percent are required to retire at age 65, the survey found.