Living to a 100 is Cool but how are you going to pay for it? New Retirement Issues Facing South Africans

May 20, 2017 | Retirement Planning


Wind the clock back a few years and a person living to a 100 would be on the news. The person would probably be interviewed and they would talk about their earliest memories. Now living to a 100 and beyond rarely makes the news as it has become increasingly commonplace.

This sounds great on the surface. More years means more experiences and providing we can keep our health we can enjoy the extra years. The headache many South Africans face in wake of living longer is how to pay for it.

The fact is that if you have one eye on retirement, stopping work at 60 is increasingly less of an option. Your retirement plan may have to stretch to four decades and beyond. The chances are you will not have factored this into your plans. According to Brian Butchart, a financial planner, only 5% of South Africans will be able to afford retirement.

“Even in a low inflation environment it is unlikely that the average person will afford this. The financial advisory community reckons at current savings levels and not taking the longer life expectancy into account only 5% of South Africans will afford retirement” – Brian Butchart.

Interesting facts about South African Retirement

  • 16% of retirees are fully dependent on state pensions
  • 4% of South Africans can afford to retire comfortably
  • 31% of retirees have to keep working to earn a living
  • 47% of retirees depend on financial support from family members and friends
  • If you start your pension at 25 you need to save 17% of your salary to be able to retire comfortably. This increases to 22% of your salary at age 30, 30% of your salary at age 35, 42% at age 40, and 55% at age 45.
  • Should you want to retire at 55 you will retirement funds 12 x your annual income. 11 x your income to retire at 60, and 10 x at age 65.
  • Should you retire today and want an income of RS 176 per month you would need funds of R1 million.
  • To retire on an income of RS1 986 per month you would need R10 million.
  • To retire on R25 980 per month you would need R5 million.

Seems like an uphill struggle?

Retirement funds such as pensions can be overwhelming in South Africa today. It doesn’t have to be as you can use an award winning financial planner like me to help you achieve your retirement goals. Simply click here and complete the CALL BACK SERVICE form and make sense of your retirement and your financial world.

For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]


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