Introduction

Relying solely on a pension in today’s unpredictable economy might not be enough to guarantee a comfortable retirement. With rising living costs, inflation, and changing job structures, it’s become essential to diversify how we prepare for the future. This article explores various non-traditional retirement planning options—from property investment to diversified portfolios—designed to offer greater financial freedom and resilience later in life.

1. Property Investment

Buying property is one of the most popular alternative retirement strategies. Whether you purchase to rent or to downsize and sell eventually, property can provide consistent income or a sizeable lump sum when you need it.

Scenario: Thabo buys a flat in his 30s and rents it out. By retirement, the mortgage is fully paid, and the rental income provides a steady monthly return.

Tips:

• Choose high-demand areas.
• Maintain the property to keep it attractive to tenants.
• Consider professional management for ease.

2. Tax-Free Savings Accounts (TFSAs)

TFSAs in South Africa allow individuals to save and invest money without paying tax on the interest, dividends, or capital gains.

Scenario: Naledi contributes the maximum R36,000 annually into her TFSA. Over 15 years, her investments have grown significantly without tax deductions.

Tips:

• Invest in a mix of ETFs or unit trusts for long-term growth.
• Start early and contribute consistently.

3. Dividend-Paying Stocks and ETFs

Instead of relying on a pension fund, you can build a portfolio of dividend-paying stocks or ETFs. These provide passive income that can supplement or replace traditional retirement income.

Scenario: Bheki builds a portfolio of high-dividend shares. By age 60, the dividends offer enough income to cover monthly expenses.

Tips:

• Reinvest dividends early on to boost compounding.
• Choose stable, established companies.
• Diversify across sectors.

4. Side Businesses and Passive Income Streams

Many people create side businesses that can grow into retirement income sources, like an eBook, online store, or consultancy.

Scenario: Mbali starts selling handmade crafts online in her 40s. By retirement, it becomes a steady income stream.

Tips:

• Focus on scalable or low-maintenance businesses.
• Build a customer base over time.

5. Retirement Annuities (RA) with Flexibility

While technically a traditional product, some modern RAs offer flexibility in investment choice and access.

Scenario: Ahmed invests in a unit trust-linked RA that allows him to tailor his portfolio as his risk tolerance changes.

Tips:

• Look for low-fee, transparent options.
• Understand withdrawal rules.

Final Thoughts

Retirement no longer looks the same for everyone, and your strategy shouldn’t either. The key is to build a mix of assets and income streams that align with your risk tolerance and lifestyle goals. With careful planning, you can enjoy your golden years without financial stress.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Splendi does not provide personalised financial, investment, legal, or tax advice. Always consult with a qualified financial advisor for guidance tailored to your individual circumstances.