How to adjust your retirement plan when your finances change

Caring for children, supporting ageing parents or taking time out of work can affect more than your monthly income. Over time, career breaks, reduced working hours and redirecting your savings towards other priorities can affect how much you have available for retirement.

But putting retirement savings on hold can have a longer-term impact than it seems at the time, increasing your retirement vulnerability later in life.

What happens to your retirement savings when your finances change?

Retirement vulnerability doesn’t usually happen suddenly at 60 or 65. It builds over time as changes in your income, career and financial responsibilities affect how much you can save for retirement.

Old Mutual Corporate’s 2025 Retirement Fund Data and Financial Wellness Studyopen_in_new, based on nearly 500 000 umbrella fund members, highlights how these changes can affect retirement outcomes. The study found that women often save a greater proportion of their salaries in the early stages of their careers yet still retire with less. From around age 41, women’s retirement trajectories begin to slow relative to men’s, driven by factors such as earning, on average, 15% less, taking more career breaks, and facing retirement fund structures not designed for modern, non-linear careers.

But these aren't the only factors. Your income may drop or an unexpected financial responsibility may mean redirecting money away from retirement savings.

During this period, you may not have the same opportunity to contribute towards your retirement savings. For some, this means missing out on employer contributions, resulting in the loss of several years of retirement contributions. For others, it may mean missing out on salary increases that could have grown their retirement savings.

Why is it important to keep saving for retirement

When your finances hit a bump in the road, it’s easy to see a missed retirement contribution as a small amount that can be made up later, or to pause your retirement savings and redirect your money elsewhere. You tell yourself it’s temporary - just until things settle.

But retirement has a long memory. The financial world likes neat lines: income, contributions, investment return, retirement date.

Retirement savings benefit from consistent contributions, investment growth and time. So, when you stop contributing, you lose more than the amount visible on your payslip. You lose years of potential compounding and the opportunity for your savings to grow over a longer period.

What should you do when your income changes?

Sometimes life simply requires you to make a different decision for a period. But your future financial security matters too. The key is not to assume that your retirement plan has to remain the same throughout your working life. You can review your retirement plan when your financial circumstances change and adjust your contributions to reflect what you can realistically afford. Even when you can't maintain your previous contribution, keeping some form of long-term savings going can help you maintain the habit and keep your retirement goals visible.

How to review your retirement plan

Major life events - like changing jobs, getting married or divorced, having a child are natural moments to revisit your retirement savings plan.

But when your financial circumstances shift, ask yourself these questions:

• Income: Has my monthly income increased or decreased?
• Expenses: Have my essential living expenses changed?
• Dependents: Do I have other family members depending on my financial support?
• Contributions: Am I still saving enough each month to hit my retirement goal?
• Timeline: If I’ve stepped out of paid work, can contributions continue in some form and if I’ve had to pause contributions, when can I realistically resume?
• Goals: Does my target retirement age or lifestyle objective need adjusting?

These questions provide a clear picture of where you stand today.