94% of South Africans aren't on track to retire comfortably: You don't have to become a statistic

According to National Treasury, a whopping 94% of South Africans aren't on track to retire comfortably - and it's not hard to see why.

The 10X Retirement Reality Report, released on the 30th of September, shows that only 7% of economically active South Africans have a clear retirement plan that they are actively executing, while 41% don't have any form of retirement plan at all. Of those who are investing in retirement savings, 53% have no idea of what they can expect their pot to be worth when they retire. 

Although there are numerous contributing factors as to why so many people are in this situation, one of the most significant reasons is that people are simply not engaging with the retirement planning process. Instead, South Africans are putting off saving for "another day", or handing over control to a third party, or even holding out for an unlikely lotto win.

As part of its mission to help people retire with dignity 10X is tackling the problem of disengaged South Africans head-on by providing all clients with access to My10X and giving non-clients access to this online calculator. These sophisticated, yet easy to use tools allow you to design your retirement plan, adjust variables, such as how much you save and the date you plan to retire, and check the health of your retirement plan at any time.

Meet G-Money

Our retirement planners are simple to master and fun to use. Our friendly and encouraging virtual giraffe (we call him G-money) is always at hand to show whether you're on track or not.

You may look like you have a lot, but do you really?

Seeing the final amount of money you can expect to retire with will generally look quite impressive. But will it be enough? The 10X retirement planner will translate your lump sum amount into expected monthly income once you retire, which will probably seem less impressive.

See the wonder of compound interest for yourself

For those content to track their target without G-money’s charms, you also have the option to switch to a more conventional but easy-to-read graph. The benefit of this view is that it shows how much you have contributed and how much you will earn in investment growth.

If you’re not yet on track don't worry, you're not alone. 10X will help you get on track by offering useful tips along the way.

How to make the most of the 10X retirement planner

Firstly, you need to know where you're going. This means knowing your number (end savings goal) and how it's calculated. Based on your current salary, 10X projects your ongoing earnings based on a 1% increase each year. The planner presumes you will need an income equal to 60% of your current salary to preserve your lifestyle in retirement. If the 60% replacement ratio does not seem appropriate for you, you can change it.

Secondly, you need to know how you're going to get to your goal. At 10X, we believe it’s important for you to be able to control your savings variables. After all, a plan that you neither understand nor have faith in is unlikely to have a positive outcome. The variables that you can control include:

  • Your current savings: Do you have savings in a money market account or cash account you could move? Note that our report found that 37% of women save cash but do not invest it. Don’t lose out on valuable growth! 
  • Your retirement age: As the saying goes, it’s not about timing the market, it’s about time in the market. The later you retire, the more time your money will have to grow. 
  • Your monthly contribution: At 10X we recommend saving 15% of your gross salary for 40 years. You should aim to save as much as you can. 

Playing with the variables in your retirement plan is a great way to see the positive impact that diligently saving a little more each month will have on your retirement. We hope it helps people to understand the importance of saving as much as possible, as early as possible.

Posted in: General Investing
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