You’ve seen the statistics and heard the warnings about South Africans not being at all financially prepared for retirement. So, how do you make sure you are not going to come up short? And which products should you be using to ensure you retire comfortably?
Most South Africans have heard the same statistic – only 6% of us will be able to retire “comfortably” – ad nauseam. The reality is that many have started too late, saved too little and even opted not to preserve their retirement savings when they changed jobs. But how much is enough?
The concept of linking retirement to an age and then looking forward to that day when you can live off your life-long savings should be buried. Retirement should rather, many financial advisers say, be seen as a “transition” from the first part of your life to the second.
Once the concept of retirement changes, the question of what is enough for retirement becomes less relevant.
The 2018 Retirement Reality Report by 10X Investments shows that 53% of the sample of 1m economically active South Africans do not know how much their pension is worth, and 41% do not have any form of a retirement plan.
Another 31% describe themselves as having a “pretty good idea” of what they are doing.
Around 21% saw their plan as “somewhat vague, indicative of widespread lack of concern and engagement with the topic of retirement planning,” it is stated in the report.
Only 7% of the respondents said they had an adequate retirement plan, and they were executing it. Steven Nathan, 10X Investments’ founder and CEO, says the returns on retirement savings in the past 25 years have been “shocking and abysmal”, despite consumers having enjoyed a positive investment environment. South Africans are not good at making long-term decisions, and retiring is something far into the future.
“We do not take it seriously enough, so we do not plan enough, and we do not know enough of what is happening in the investment environment.”
Nathan says the principles are simple enough. Start saving from your first paycheck and preserve your retirement savings when you change jobs.
Esta historia es de la edición 22 November 2018 de Finweek English.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición 22 November 2018 de Finweek English.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
THE HEALTH OF SA'S MEDICAL SCHEMES
As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.
The effect of Gilbertson's departure
With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.
Making money from music
Why investors are increasingly drawn to the music industry.
Conviction is key
Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.
The post-pandemic toolkit
How CFOs can use technology to support growth.
Big city living exodus
Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.
Big compact, big value
Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.
On barriers to entry
There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.
Fear and greed in one index
To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.
Africa's largest data centre facility coming soon
Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.
