94% of South Africans face retirement income shortfall

July is National Savings Month and one of the initiatives conducted to raise awareness of the importance of saving has been Old Mutual’s Savings Monitor.

Not surprisingly, the results of this survey show that over the last few decades, South Africans are saving less and have more debt.

This tendency to ignore future planning – most importantly, retirement planning – will result in 94% of people having to accept drastically lower standards of living in retirement and, in many cases, rely on the financial support of others.

The study revealed that in order to retire at 75% of your working income, one would need to save 30% of one’s income during their working life.

At best, the average employee with a retirement fund is putting away about 13.5% of their salary for retirement.

South African’s face a plethora of price increases, not the least of which include rising electricity costs, fuel costs, municipal rates and highway tolls (highway robbery?)

Under this kind of pressure, savings easily takes a back seat. But the reality is that rising costs only highlight the need for a really serious commitment to saving for retirement starting now.

If you are not absolutely sure that your retirement plans are realistically going to meet your retirement needs, it’s time to face up to the numbers.

Let’s prepare retirement projections that will help you take an informed view of your retirement situation.

To take this to the next step, email me and I’ll let you know what information will be needed to proceed and we’ll work through the process together.

To see the Old Mutual Savings Monitor visit: http://www.oldmutual.co.za/personal/financial-planning/old-mutual-savings-monitor.aspx