How healthy living changes retirement planning


There are two essential elements to preparing for a long and happy retirement: health and wealth. Improving health is adding years to our lives, which is great, but we need to recognise how it changes the parameters of retirement planning.

Behaviours that lead to inadequate savings

Inadequate funding is caused by behaviours such as saving too little or too late for retirement, failing to preserve funds when changing jobs, and increasing longevity. Combined, these behaviours have resulted in South Africa being in a savings crisis, in which 94% of South Africans are underfunding their retirement. This means that 94% of South Africans are unable to achieve at least 75% of their pre-retirement savings in retirement.

And while 75% of pre-retirement income is the desired income level in retirement, a 2018 study from Schroders found that most affluent South Africans are only achieving around 59%, a staggering 21.3% shortfall.

The three major implications of inadequate retirement funding are: financial ruin in later years, intergenerational debt as you borrow from your children and financial institutions, and increased state dependency.

Increased longevity is one of the biggest risks for retirement savings

While all the behaviours above affect retirement savings, the one most overlooked and underestimated is the impact of ever-increasing longevity. As longevity increases through healthier living, good nutrition and regular exercise, the gap widens between how much you think you need in retirement, and how much you will actually need given your increased years of life.

The below table shows how behaviour intervention can increase longevity.


Average additional life years gained

Medicine adherence










Physical activity





Social connection

Social connection


Living five to 10 years longer than expected has a significant affect on the amount of income needed. This, combined with retirement savings that already fall short of the desired replacement value, can have a devastating impact on your retirement savings and standard of living.

Helping you enjoy your increased years of life

We continually aim to provide you with the best retirement solutions that enhance your standard of living, both in terms of wealth and health. We deliver on this effectively by using the power of shared value. Thus far, the Discovery Invest shared-value model has created over R7 billion in additional value for clients.

Also, by using the shared-value model, we have seen a significant change in the way clients save. Individuals engaged in shared-value investing save on average 3.27 years longer than other individuals. They make up to 173% more ad hoc investments into their retirement plans, and after retirement they withdraw on average 3% less from their living annuities every year.

I hope you will enjoy this issue

It is my pleasure to share with you our latest issue of Invest Insights. Among other articles, we share insights from the Sage of Omaha, Warren Buffett. Award-winning financial planner Warren Ingram talks about living longer longer than you think and what that means for your investment portfolio. And we take an interesting look at the Fourth Industrial Revolution in a piece by Investec Strategist, Michael Power. We also bring you the latest updates on Discovery funds and podcasts from portfolio managers.

Please share your feedback with me by emailing

Kenny Rabson
CEO of Discovery Invest

This article is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services Pty (Ltd): Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply. The views expressed in this article are those of the author and may not necessarily represent those of Discovery Invest.

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