Few phrases sound as reassuring as ‘increased life expectancy’. Thanks to medical advances, improved nutrition, and greater awareness of healthy living, South Africans are living longer than ever before. But, while longevity may be a triumph of modern progress, it is also one of the most underestimated risks to a person’s financial plan. The challenge is not merely ensuring you don’t outlive your money, it’s understanding what those extra years may actually cost, in both financial and human terms.

The longevity paradox

It goes without saying that the longer we live, the longer our capital must last, and the more unknowns we must account for. While financial projections can model inflation, returns, and drawdown rates, they struggle to anticipate the non-linear costs of ageing. Bear in mind that while life expectancy tables may predict averages, life itself doesn’t follow averages.

Some retirees remain healthy and active into their 90s, whereas others encounter health shocks or cognitive decline decades earlier. For us as financial planners, this unpredictability makes longevity planning as much a psychological and social issue as a financial one.

The escalating cost of health

We all know that medical inflation consistently outpaces headline inflation, and that the financial burden of healthcare rises steeply in the later years of life. Chronic conditions such as diabetes, hypertension, and heart disease often require lifelong medication, while age-related illnesses like arthritis, Parkinson’s, or dementia introduce new categories of expense – from specialist consultations to mobility aids, home adaptations, and private nursing care. Even the healthiest retiree will likely face higher out-of-pocket costs for gap cover, co-payments, and non-formulary drugs.

Then there is the growing field of life-extending medication, which, while not miracle cures, are maintenance treatments that can add years – and expenses – to life. Keep in mind that many of these drugs fall outside medical aid formularies, meaning retirees must pay privately for them and, in this sense, longevity literally comes at a price.

Frail care and the new economics of ageing

The reality is that few financial plans properly account for long-term care. While many assume they will live independently in their own homes for the rest of their lives, this is not always possible or practical. The cost of assisted living and frail care in South Africa has escalated sharply, with monthly fees now ranging from around R30 000 to R60 000 and often increasing at rates above inflation. For couples, these expenses can double if both partners eventually require care, and many facilities also require a significant upfront capital contribution.

Even before full-time frail care becomes necessary, there are transitional phases that require funding: home-based nursing, part-time carers, meal delivery, transport support, and a growing market of monitoring technology such as Aid Call devices, fall detectors, and home-based sensors. While these services provide dignity, comfort, and safety, they can draw down investment capital at a much faster rate than many investors anticipate.

The invisible burden: family as caregivers

As retirement planners, we often find that when financial resources fall short, the responsibility of care often shifts to family members. Adult children, already stretched by their own financial and emotional obligations, can find themselves supporting ageing parents both financially and physically. The ‘sandwich generation’ – those caring for both their children and their parents – faces growing burnout as longevity extends both ends of the dependency timeline.

Even where families can afford private care, the coordination, oversight, and emotional load of managing ageing parents can be immense, with this unpaid labour seldom featuring in retirement spreadsheets despite the fact that it carries significant emotional and opportunity costs.

The dilemma of incapacity

The reality is that longevity increases the statistical likelihood of diminished capacity, whether physical, cognitive, or both. When incapacity sets in, simple tasks like renewing a licence, visiting a bank, or authorising a transaction can become insurmountable. Further, without proper legal and administrative planning, families may face lengthy and expensive court processes to manage a loved one’s affairs.

Frustratingly, for many retirees, physical incapacity also complicates daily logistics in that tasks that once required a quick trip to Home Affairs, a pharmacy, or a municipal office can become daunting or impossible. These barriers increase dependence on paid helpers, transport services, or professional administrators – another set of hidden costs rarely factored into financial models.

Technology, privacy, and protection

While technology promises enhanced independence, it introduces its own complexities. Online banking, digital health records, and remote monitoring systems are invaluable tools for ageing safely, but they also expose the elderly to cybercrime and exploitation. Financial scams targeting retirees are on the rise, with fraudsters exploiting cognitive decline and social isolation. Maintaining financial safety in one’s later years may increasingly require professional oversight – such as a trusted advisor or fiduciary – adding another layer of cost and complexity.

The psychology of long life

Beyond finances, longevity can also challenge our sense of purpose and identity. Whereas retirement was historically a 10- to 15-year phase, today it can span 30 years or more – long enough to include multiple reinventions of self. The risk of ‘outliving one’s usefulness’ is a psychological threat as real as the financial one, with many retirees attesting to experiencing the erosion of social networks, loss of professional relevance, and the questioning of purpose.

This emotional dimension has financial implications too – from the cost of staying socially engaged to the temptation to overspend on travel or gifts as a substitute for purpose.

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