5 Things No One Told You About Midlife and Money

The following article is by Kim Potgieter, Certified Financial Planner, author and coach; who gives us some valuable insight into money management strategies that can help provide South Africans achieve financial freedom:

Midlife is not an intense, short-lived crisis that can be controlled and managed. It is more of an unravelling—a longer, slower process (often a series of painful nudges) that offers the chance to reflect on our past and make intentional decisions about our future. In this unravelling, many of us find that life looks different from what we expected. We might still support adult children or suddenly face a job loss or relationship change. After 15 years of guiding people through these transitions, I’ve learned five important things about midlife and money.

1. You (probably) won’t retire

The idea of retiring at 55 or 60 is becoming less attainable for most people. We’re living longer, which means we need more money to sustain us. In reality, many people simply don’t have enough saved or are burdened by debt, making early retirement difficult, if not impossible. Researchers suggest that a 60-year career could replace the current 40-year one.

What to do next:

If the thought of staying in your current job for another 20 or 30 years feels overwhelming, now is the time to explore new opportunities. Consider reskilling or gradually transitioning into a role that excites you. One approach I often recommend is to start crafting meaningful work while still in your current job, allowing you to shift at your own pace. The earlier you begin planning, the more prepared you’ll be to work longer in a role that aligns with your passions and purpose.

2. Children leaving home doesn’t end financial support

While many parents expect their financial responsibilities to ease once their children finish school, the reality is often quite different. The cost of further education post-matric can be substantial, and many children seek study or work opportunities overseas, leading to significant expenses for parents. Some children return home to save for a house or because they struggle to find a job. In some cases, they move back in with partners and children, increasing household costs even further. 

What to do next:

Prepare for the possibility that your children may continue needing financial support after leaving home. Include this in your financial plan, but be clear on setting boundaries to protect your own financial well-being. It’s important to help them, but not at the expense of your own future security. 

3. Retrenchment is a growing risk

As industries evolve and technology advances, job security is no longer guaranteed—particularly in midlife. Retrenchment is becoming more common, and for those over 50, finding new employment can be especially difficult. According to StatsSA, South Africa’s unemployment rate is now at 33.5%, the highest it’s been in two years. The longer it takes to find a new job, the harder it becomes to re-enter the workforce, especially if you decide to take a sabbatical after retrenchment to figure out your next step. While a break can help you reassess your goals, it can also make re-employment more challenging as gaps in your work history grow.

What to do next:

Stay proactive by continuously updating your skills and maintaining relevance in your field. A financial safety net, like an emergency fund, can offer protection in case of job loss. Consider insurance options, such as disability or retrenchment cover, for additional security. Preparing now will help you navigate unexpected events with more confidence and keep your options open if you decide to take a sabbatical or need extra time to find new work.

4. Relationship changes can reshape your financial future

Midlife is often filled with unexpected transitions, such as divorce, the death of parents, health scares, and feelings of irrelevance. Divorce, in particular, can have a significant financial impact. StatsSA reports that 48% of men divorcing are between the ages of 45 and 64, and 36% of women in this age group go through divorce. The emotional strain of separation is often compounded by financial challenges, from dividing assets to managing single-income households. The death of a parent or partner and sudden illness can also bring unexpected expenses, altering your long-term financial security.

What to do next:

Regularly review your financial plan with your partner and ensure you are both involved in managing finances. Being transparent is key, and working with a financial planner can help guide you through these transitions. Ensure you have adequate insurance, including life cover, medical aid, and disability cover, and keep your estate plan up to date to safeguard your financial security.

5. Starting a new venture can be risky

Midlife often sparks a search for meaning and purpose, leading many to consider changing careers or starting a new business. While pursuing your passion can be deeply fulfilling, new ventures come with financial risks. Building a stable income can take much longer than expected, and using your retirement savings to fund your business can jeopardise your long-term security.

What to do next:

If you’re considering starting a new venture, take a cautious, gradual approach. Avoid using your retirement savings, and have a clear, practical plan for how you will fund the business without compromising your future. Align your business goals with your financial plan to ensure that your pursuit of purpose supports your long-term financial well-being.

Midlife brings challenges and opportunities, but every transition calls for a reassessment of your financial planning. It’s essential to clearly understand your entire financial landscape and your vision for this next life phase. This is a time to be sensible and intentional, not to make rash decisions. By aligning your financial goals with your evolving life goals, you can navigate midlife with confidence and clarity, ensuring that your actions today support a secure and fulfilling future. 

You can check out more from Kim Potgieter by heading over to her website, where you’ll find a wealth of resources and information on essential money management tips and conversations.