But according to certified financial planner (CFP) and team leader of retail investments at 10X Investments André Tuck the secret lies in understanding what he calls the “golden equation”.

“It refers to a sustainable withdrawal framework for those who want to survive and thrive in retirement,” explains Tuck.

The golden equation explained

The principle is simple:

Drawdowns + Fees + Inflation = Investment Returns.

Tuck says this formula helps retirees strike the right balance between what they take out of their investments and what those investments earn over time. “If your withdrawals, costs and inflation together stay below your investment returns, your money lasts. If not, you risk running out too soon,” he notes.

A practical rule often used to guide this balance is the 4% rule. Originally developed by financial planner William Bengen in 1994, it assumes retirees can safely withdraw 4% of their portfolio in the first year and adjust that amount annually for inflation.

“For retirees today, this rule still makes sense as a starting point,” says Tuck. “It falls comfortably within the legal withdrawal range of 2.5% to 17.5% for living annuities, and it’s built on the logical premise that you shouldn’t withdraw more than your investments can sustainably generate over the long term.”

Why Fees Matter More Than You Think

While retirees can’t control inflation or market returns, one factor firmly in their hands is fees. “It’s critical that you assess all the fees you’re paying on your retirement savings,” says Tuck. “High fees can quietly eat away at your nest egg, reducing your long-term returns.”

He illustrates this with a simple comparison:

· Scenario 1: High-cost living annuity provider

o   Withdrawal: R200,000

o   Annual fees: R125,000 (2.5%)

o   Total leaving portfolio: R325,000

o   Required return to break even: 6.5%

· Scenario 2: Low-cost living annuity provider

o   Withdrawal: R200,000

o   Annual fees: R50,000 (1%)

o   Total leaving portfolio: R250,000

o   Required return to break even: 5%

“That seemingly small difference in costs means you need an extra 1.5% in investment returns every single year just to achieve the same retirement income,” says Tuck.

The Four Steps to a Golden Retirement

According to Tuck, achieving sustainable retirement income doesn’t require guesswork — just discipline and a clear strategy:

1.      Minimise what’s working against you – reduce costs.

2.      Use 4% as a baseline, not a law. Adjust your withdrawals based on market performance.

3.      Stay flexible with market conditions. Your plan should adapt to changes.

4.      Focus on what drives returns – review your asset allocation.

With more than 30 years in financial services, Tuck has seen first-hand how consistent, cost-conscious planning changes lives.

“What makes me happiest,” he says, “is walking the road towards financial independence and beyond with clients, to ensure they have a well-deserved retirement.”

For South Africans nearing or in retirement, that journey starts by applying the golden equation — and letting sound financial principles, not luck, determine your golden years.

For more on 10X Investments’ low-cost, evidence-based retirement solutions, visit www.10x.co.za.