South Africans are Dancing Their Way to Extended Work Lives
According to a recent survey conducted by Old Mutual, it seems that a whopping 8 out of 10 South Africans will have to work beyond their expected retirement age due to a shortage of retirement savings. Let's dive into the survey's findings.
Picture this: the average South African has nested away less than R100,000 for their retirement. While this might seem like a nice sum to buy a round of drinks at a retirement party, it's barely enough to cover the cost of living during one's golden years. With estimated monthly expenses around R20,000. It seems the elusive dream of sipping piña coladas on a beach while the worries of work melt away is fading fast for many.
Let's put this into perspective: if you were to live off your retirement savings alone, you'd be able to maintain a comfortable lifestyle for a mere five months. Ouch! That's hardly enough time to get through a season of your favourite TV series.
From the high unemployment rate to inadequate financial literacy and a culture that sometimes favours immediate gratification over long-term planning, South Africa faces several hurdles on the path to a secure retirement.
Here are a few tips to steer us in the right direction:
· Start saving early: The power of compounding interest is a force to be reckoned with. The sooner we begin setting aside money for retirement, the more time it has to grow.
· Embrace the magic of budgeting: By establishing a budget and sticking to it, we can ensure that a portion of our earnings is consistently allocated towards retirement savings. Remember, every rand counts!
· Diversify your investments: Consider spreading your investments across various asset classes to minimise risk and maximise potential returns.
· Take advantage of retirement savings vehicles: Explore the benefits of tax-advantaged retirement savings options, such as pension funds or retirement annuities, TFSA. These vehicles can provide a boost to your nest egg while offering tax advantages.
