People need more support as they approach retirement

There is always a lot of talk about supporting people at the beginning of their working life to start saving for retirement, but very little is said about support for people who are close to retirement. Is it time to beat the default paradox?

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Karen Wentzel, head of annuities at Sanlam Corporate Investments, says you should imagine you are on a highway with guardrails providing a safety barrier that protects you from going off course, guiding you safely to your destination.

“However, when you reach retirement, the guardrails come off, leaving you uncertain and in a way unprotected. Which direction should you take to ensure the rest of your journey is safe?”

She says that is what it is like for many employer retirement fund members who rely on trustees' selected portfolios for their savings up until they reach the big R. “Then they choose to navigate this new, complex terrain alone, which can lead to suboptimal outcomes.