{
  "id": 957373,
  "title": "Here’s how to make your retirement funds last longer",
  "url": "https://urgent.news/2026/08/15/heres-how-to-make-your-retirement-funds-last-longer",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-15T05:00:00.000Z",
  "source": {
    "name": "The Citizen",
    "slug": "the-citizen",
    "url": "https://www.citizen.co.za/business/personal-finance/how-to-make-your-retirement-funds-last-longer/"
  },
  "original_language": "en",
  "account": "Retirement planning often emphasizes the need to save before entering the golden years, but a key question remains: \"How much can I safely spend each year without running out of money?\" Momentum Investments’ Martiens Barnard sheds light on why the popular 4% to 5% retirement income rule of thumb remains relevant, even as many South African retirees may be drawing more than their savings can support.\n\nThis rule of thumb is not a precise formula; rather, it’s an experience-based principle designed to enhance decision-making and outcomes in financial planning. Over decades, this principle has guided retirement decision-making. The 45th Sanlam Benchmark Survey revealed that South African pensioners who take a cash lump sum at retirement typically exhaust their funds within a year and a half.\n\nThe guideline for a 4% to 5% withdrawal rate originates from William Bengen’s research, which demonstrated that withdrawing around 4% in the first year of retirement, with inflation adjustments each year, could sustain income for 25 to 30 years. However, the behavior of the South African market paints a different picture. Many retirees exceed this recommended guideline, straining their retirement savings and jeopardizing the long-term sustainability of their income.\n\nBarnard highlights five critical risks that determine whether retirement income lasts:\n\n1. Drawing too much income – A drawdown rate that is too high is a common mistake. Higher withdrawals necessitate higher returns to maintain income sustainability, increasing reliance on market performance and reducing the safety margin.\n2. Market risk and sequence risk – Markets are unpredictable, and retirees face short-term losses as well as potential long-term underperformance. Sequence risk, the order of returns, compounds this issue.\n3. Inflation risk – Over time, inflation erodes purchasing power. Income that doesn’t keep pace with rising living costs will fail to meet retiree needs.\n4. Behaviour tax – Emotional decision-making during market volatility, such as switching investments, often reduces long-term value.\n5. Longevity risk – With increasing life expectancy, more retirees face the challenge of their income lasting 30 years or more.\n\nTo achieve a sustainable income, Barnard suggests starting with a 5% initial drawdown, with withdrawals increasing annually by 5%. This approach assumes a net return of about 8.2% annually to maintain living standards. However, starting with a lower initial rate, such as 7%, would require a higher net return of over 11%. Missing this higher target by just 2% could shorten income sustainability by up to a decade.\n\nBarnard emphasizes that these risks and other aspects of retirement, such as inheritance, are explored in a series of insightful videos to help clients and financial advisers make better retirement decisions.",
  "summary": "A report has found that retirement savings run out after 14 months.",
  "key_points": [
    "4% to 5% withdrawal rate remains a relevant guideline for retirement income",
    "South African retirees often exceed recommended withdrawal rates, straining savings",
    "Five critical risks determine retirement income sustainability"
  ],
  "editors_take": "Retirees who exceed the 4% to 5% withdrawal rate guideline risk straining their savings and jeopardizing long-term income sustainability, highlighting the need for careful planning to mitigate key risks.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}