JOHANNESBURG – New data on retirement readiness in South Africa underlines the importance of people taking a charge of their retirement affairs and setting out a formal retirement savings plan says Steven Nathan, 10X Investments’ founder and chief executive.

“No one cares more about your money than you do,” says Nathan, who adds that savers need to focus on controlling the things they can, “such as how much you save, how you invest your money and how much you pay away in fees”.

Just 7 percent of the respondents in 10X Investment’s first annual Retirement Reality Report (RRR), released on Sunday 30 September, said they had an adequate retirement plan and were executing it.

The report shows that less than a quarter of respondents (22 percent) began planning for retirement at the beginning of their careers, while more than 50 percent of respondents express regret over not having begun saving earlier in life.

While going back in time is not an option, a do-over of your current savings set-up is. According to Nathan, there are various aspects under your control that will improve your retirement savings outcomes:

  • Make a proper retirement savings plan.
  • Save as much as you can, especially in your younger years.
  • Keep fees down: The less you pay away in fees, the more money stays invested on your behalf, delivering compound growth over the decades. 10X Investments never charges more than 1 percent in fees, against the industry average of 3 percent. A saving of 2 percent compounded over the life of an investment can add up to 60 percent more money when you need it most.
  • Be tax savvy: If you are saving via a retirement fund (pension, provident or retirement annuity fund) you don’t pay tax on your contributions up to 27.5 percent of your salary, to a maximum of R350 000 a year.
For those whose who are not on track to a comfortable retirement, there are ways to improve the situation, such as switching to a product that charges lower fees. They could also delay their retirement date or go into a super saving mode.

10X Investments commissioned Brand Atlas to expand its annual survey of the South African population to gather the data for the RRR. 

Brand Atlas samples the universe of 11.9 million economically active South Africans as defined by Statistics SA (those with a monthly income above R7 600) through online completion surveys.

10X Investments, which provides a range of simple, low-cost products to investors and retirement savers, hopes the report will draw attention to South Africa’s retirement saving crisis, create an understanding of the underlying causes and promote a discussion around the corrective steps necessary to improve people’s retirement outcomes.

PERSONAL FINANCE