Most South Africans don’t think about retirement until it’s too late. We believe we need a lot of money to start. We think our employer’s fund is enough. We confuse products. We misunderstand tax. We resign and take cash payouts. And we assume life will somehow work itself out.
But financial reality is unforgiving.
Retirement Specialist Suzan Ramotshabi has spent over a decade educating people about the products, decisions, and mistakes that shape retirement. Her insights reveal one truth: retirement is not an event — it is a plan.
Understanding Retirement Products: A Simple Breakdown
Suzan simplifies retirement using two categories:
1. Pre-Retirement Products (Where You Save)
These are products you use before you retire:
- Pension fund (through employer)
- Provident fund (through employer)
- Retirement annuity (RA) (private — you open it yourself)
- Pension preservation fund (where you transfer pension money when leaving a job)
- Provident preservation fund (same as above, but for provident funds)
These are your building years — where you save, invest, and compound.
2. Post-Retirement Products (Where You Withdraw)
These are products you use after you retire:
- Living annuity
- Life annuity
Here, your savings turn into income.
Living Annuity vs Life Annuity: The Difference People Don’t Know
Living Annuity
- You decide how much income to withdraw (minimum of 2.5% to a maximum of 17.5% per annum).
- Your money continues to be invested while you recieve a pension.
- If you pass away, the balance goes to your beneficiaries.
Life Annuity
- You get a guaranteed income for life.
- No flexibility.
- Usually: if you pass away early and there’s no guaranteed period, the money disappears.
Suzan’s Practical Breakdown:
- Life annuity = guaranteed salary for life (your life or your spouse’s, if there is a guaranteed period).
- Living annuity = flexible monthly income, but requires discipline
Suzan has seen families lose their entire retirement savings because they didn’t understand this difference.
Real-Life Scenario: A Family Loses R1.2 Million
A young police officer visited Suzan because he wanted to avoid his father’s mistakes. His father worked for decades and retired with R1.2 million. He purchased a life annuity with no guaranteed term. Three months after retiring, he passed away.
The family received nothing.
This tragedy forced his son — then very young — to leave school to support the family.
The officer told her:
“Help me. I don’t want to be like my father.”
This scenario is more common than people think — thousands of families lose generational wealth because they don’t understand annuity products.
Suzan’s lesson:
“Retirement decisions are not reversible. Once a product is chosen, your family lives with the consequences.”
Preservation Funds: The Pot That Saves You
When you leave a job, Suzan strongly advises transferring your pension or provident payout into a preservation fund instead of cashing out.
Why?
- You avoid heavy tax
- You keep the money invested
- You avoid starting from zero
- You can transfer multiple employer funds into one pot
- You protect your retirement from impulsive decisions
Do You Lose Your Money If You Miss a Contribution?
It depends on the product.
Employer Pension/Provident Funds
You cannot miss a contribution—it is deducted automatically.
Modern RAs (like ETFSA, Signia, Easy Equities)
You can pause contributions anytime by emailing the provider.
Old Contract-Based RAs (Sanlam, Old Mutual, older legacy products)
If you miss payments, the policy may lapse because you signed a strict contract promising monthly contributions for a set number of years.
This is why many people today prefer flexible, modern RAs because sometimes life happens, and contributing to an RA is the last thing on your mind.
How Much Is Enough to Start?
Suzan says:
“You don’t need thousands to invest. Start small.”
At her organization, the minimum contribution for an RA is R300 per month.
This alone changes people’s mindset; most South Africans think investing requires wealth, when it really requires consistency.
TFSA vs Retirement Annuity: Are They the Same?
No.
A Tax-Free Savings Account (TFSA) is a flexible investment vehicle where your growth is not taxed.
A retirement annuity (RA) is specifically built for retirement, with contributions being tax deductible and withdrawal restrictions.
ETFSA — Suzan’s organisation — offers the following products:
- Retirement annuities
- Tax-free investments
- Living annuities
- Discretionary investments
- Wealth management
Each product serves a different purpose in your financial well-being, and many South Africans use both an RA and a TFSA for long-term wealth building.
Changing Jobs and Losing Your Retirement Money
Many South Africans resign and take their pension or provident fund payout as cash.
Suzan warns that this is one of the biggest financial mistakes young professionals make.
When you leave a job:
You should transfer your savings to a preservation fund—not withdraw them.
Why a Preservation Fund?
- Protects your retirement money
- Allows your savings to continue growing
- Prevents unnecessary tax penalties
- Lets you build wealth while moving across multiple employers
Think of it as a “retirement wallet” that follows you throughout your career.
- Retirement is your responsibility — not your employer’s.
- Starting early is more important than contributing a lot later.
- Avoid cashing out at resignation — preservation funds save futures.
- Understand the difference between living and life annuities before choosing.
- A bad retirement decision cannot be undone.
- Asking for help is not weakness — it is wisdom.
- Retirement is not for old people — it is for prepared people.
Your Future Depends on Decisions You Make Today
Retirement is not a distant dream; it is a financial reality that will come whether you plan for it or not. Suzan’s work teaches us that every decision—from your first job to your last contribution—shapes your quality of life after employment.
Start now.
Start small.
Ask questions.
Protect your future.
Because as Suzan reminds us, retirement is not just about money. It is about dignity, peace, and the financial legacy you leave behind.
