In March, we commemorate our human rights as South Africans. In remembrance of South Africa’s long road to democracy – and the struggles along the way – the month is dedicated to understanding and celebrating our cultural, religious and racial differences.
A cornerstone of this democracy is the Bill of Rights, which is intended to protect all South Africans from infringements on their human rights, affirming the democratic values of “human dignity, equality and freedom.”
While not something that is formally stipulated in the Bill of Rights, the right to retire comfortably is consistent with these same values enshrined in the constitution.
“Sadly, a large portion of our population were financially excluded by the apartheid administration, and so – when it comes to retirement – many of us still lack a clear understanding of our rights, and how to save effectively for old age,” says Abulela Gazi, Executive Head: Client and Business Solutions at Metropolitan.
A 2021 research paper states that the saving behaviour of an individual can, in part, be explained by behavioural factors and the impact of having an insufficient income. “Due to the income inequality within South Africa, certain individuals may be disproportionately affected by insufficient income, often along racial, educational and gender lines due to the racialised and gendered distribution of wealth.”
Gazi says that even if your means are limited, it is important to be aware of your rights when it comes to retirement. “The most important thing to know is that it is never too late to start saving, even for retirement. “Having said that, the earlier you can start, the better, as you will benefit from compound interest. This is when your interest earns interest, creating a powerful snowball effect.”
Gazi shares the three most important ‘retirement rights’, which all South Africans need to know.
Retirement right #1: You have the right to retire comfortably
A comfortable retirement is not something for only an elite few – it is for everyone. It is important to understand that you don’t need to be wealthy to save for retirement, says Gazi.
“No matter your background, income or personal circumstances, you have the right to not worry about making ends meet in your old age. But, an important condition attached to this right is that it is your responsibility to make sure that you will be comfortable when you someday stop earning an income – no one else can do this for you.
“Every little bit counts. Don’t wait until you have a lump sum to save – start today, putting away as much as you can afford every month,” he says.
Retirement right #2: You have the right to be treated fairly
Gazi advises that you get in touch with a qualified and experienced financial adviser, to help you plan for retirement. However, he adds, it is important to know your rights before you engage with them.
Treating Customers Fairly (TCF) is a regulatory framework that governs authorised financial services providers and intermediaries, ensuring that they deliver specific and fair outcomes for customers. These six outcomes are fair treatment, products that meet your specific needs, clear information, suitable advice, products that perform to expectations, and no unreasonable post-sale barriers.
“You have the right to demand clear information about a financial product, such as a retirement annuity, so that you can understand exactly what it offers you. You also have the right to ask your financial adviser questions about anything you are unsure of, such as “what are the fees attached to this plan?” and expect that they explain it to you in a way that is free from jargon, and which makes sense to you.
Retirement right #3: You have the right to choose the best solution suited to you
There are affordable retirement plans on offer, says Gazi and you have the right to ask about – and understand – the options available. “There are various solutions that might suit you, depending on where you are in your life stage (pre or post-retirement age). Look for one that offers you the greatest value, with the lowest fees. This will help you grow your money over time.
“Make sure that you consult a reputable financial adviser, who will be able to guide you in selecting the one that best suits your unique needs. They will also be able to explain the various tax breaks to you, helping you to take advantage of them.”