Given the dismal savings rate in the country, it has become increasingly vital for South Africans to initiate retirement planning. Experts suggest saving at least ten times one’s annual salary to ensure a secure and independent future.

The latest Baseline survey on financial literacy in South Africa reveals concerning statistics. Only 46% of adults tend to prioritize immediate concerns over planning for their future. Additionally, 44% admit to not actively saving, and a third of South Africans lack a retirement plan.

The National Treasury expresses worry about the reliance on government pensions, emphasizing the importance of avoiding a society dependent on handouts rather than personal savings. With the aging population and rising life expectancy, securing financial stability in one’s golden years becomes paramount.

Given the current economic climate and uncertainties surrounding pension funds, relying solely on state benefits may prove insufficient. Building a financial safety net through retirement savings becomes imperative for a comfortable and independent future, according to Adriaan Pask, Chief Investment Officer at PSG Wealth.

Fidelity Investments suggests a rule of thumb for retirement savings: aim to save ten times your income by age 65 to maintain your current lifestyle. This target can be adjusted based on your preferred retirement age. Starting early and reaching specific savings milestones based on age can make achieving this goal more manageable.

Fidelity’s recommended savings milestones include:

  • Savings equivalent to your annual salary by age 30.
  • Three times your income by age 40.
  • Six times your income by age 50.
  • Eight times your income by age 60.
  • Ten times your income by age 65.

It’s crucial to note that these guidelines encompass savings in retirement accounts and investments like index funds. The actual savings amount depends on individual lifestyle and income. While personal goals may vary, these milestones can serve as a helpful guide for staying on track with retirement savings.

originally posted on https://businesstech.co.za/news/wealth/730817/how-much-money-you-need-to-save-to-retire-comfortably-from-ages-30-to-65/