Retirement savings: Control what you can

Carina JoosteLatest, Retire

happy sun with dark glassesThe 2022 Retirement Reality Report (RRR) from 10X was released end of September. And just like the preceding RRRs, the report highlights unrealistic expectations and a widespread lack of retirement planning and engagement in the matter amongst South Africans. For example, only 31% of respondents have a “pretty good idea” of what they’re doing regarding their retirement plan, with 8% executing a “thought-through” retirement plan.

It’s tough out there

The report reflects the hard realities the majority of South Africans are facing. 46% of survey respondents indicated that they’re not saving for retirement, with 70% indicating that they just cannot afford to save as there’s nothing left at the end of the month.

A stoic approach to retirement

There are many things that are simply out of our control: The fuel price, the rising cost of living, how the market behaves, etc. So we do what we can with what we have.

And here I would like to highlight the following insight from the rather depressing RRR – the authors argue that small adjustments can significantly improve one’s retirement outcomes – and these adjustments are in our control.

Let’s look at what you can control:

Increasing your savings rate

10X has a great retirement savings calculator: Simply enter your age, your pre-tax salary and how much you already have saved up (if you do) and click ‘calculate my goal’. It will show you how much you’ll need to replace 60% of the value of your last salary before you retire, and if you’re on track to getting there. The calculator also allows you to play around with your monthly savings rate, allowing you to easily see the difference that every percentage can make to the amount you’ll retire with. Give it a spin.

Not cashing out if you switch jobs

Preserving your provident fund savings is critical when you switch jobs – however small you think that amount might be, as the long-term impact can be much, much bigger. We did one such calculation here.

Go for low fees – always

Think 3% is not a bad fee to pay your financial service provider for investing your hard-earned cash? Think again: Every 1% saved on fees increases your investment by 20% to 30% over 40 years. To get better acquainted with fees (and what they all mean), click here.

Check-in to say hi

Once that RA debit order has been set up, we can just walk away knowing that our retirement is sorted, right? Not really. Checking in on how you’re tracking against your goal puts you in the driver’s seat toward retiring without any nasty surprises. Re-tired shared a fantastic quote on this topic when we asked him about his retirement savings journey: “For the first 20 years or so of my working life, I used to receive and file away my RA & pension fund statements without really looking at how they were performing. I barely spent 10 minutes per year planning for my 30-odd years of retirement.”


Retire blog

Saving for retirement is the biggest investment most of us will ever make. Sadly, it can also be very complicated. In this monthly blog, Carina Jooste responds to common retirement questions, ranging from which products are best suited to different circumstances to efficient tax treatments.