Sometimes a good kick up the backside is just what’s needed, and that’s usually what sitting down with a financial advisor entails.
I remember shaking my head at the figures thrown my way, and seeing the difference that getting your ducks in a row a few years earlier can make, and now it’s all about trying to play catch up.
Not that I’m alone on that front, because a poll by Business Tech shows that South Africans, on the whole, aren’t exactly hitting it out the park.
First up, the poll results:
Those numbers might not mean much, but when you look a little closer they point towards a worrying future:
A recent Global Investor Study by Schroders found that South Africans were under-saving by six percentage points, when looking at what they expected to get out of retirement savings, versus what they were putting away.
The study showed that the percentage of their monthly salary South Africans think they should put away to have a ‘comfortable’ retirement is close to 20% – however, saving trends indicate that they are only putting away 13%.
There is also a gap between what non-retired people believe should be put into investments (10%), compared to what retired people have actually allocated (27%).
“South African retirees are receiving a much lower proportion of their final salary in retirement (59% on average) than people approaching retirement think they will need to live comfortably in their golden years (80% on average),” Schroders said.
Our private wealth management experts, Consequence, are all about crunching the numbers to ensure you get to put your feet up in comfort.
If only they had a word with me back in the day.
Another poll, run by Sanlam, showed even more worrying results, that are probably a better indicator of where we are at:
The majority of respondents (55%) in the poll said that they put less than 10% away for retirement each month. Sanlam found that the average savings rate is 7% – compared to the suggested minimum of 15%.
While most respondents (45%) said that they had started saving for retirement in their 20s – the balance was starting ‘too late’, with a sizeable portion (20%) saying they started in their 30s, and 16% started after the age of 40.
Worryingly, 19% said that they were not saving for retirement at all.
Truth bomb here – South Africans should start saving for retirement at the age of 23. I just cast my mind back to those days, and I cannot recall an inkling of an idea to save money.
It would be unfair to compare our earning potential with some of the world’s more developed (and unpillaged) economies, but numbers like those above do make for sombre reading.
No time like the present, right? Consequence Private Wealth live by the mantra that “the consequences of decisions made today will unfold over a lifetime based on the sound principles applied at their inception”.
Let that be a lesson to all of us who took our eyes off the ball in our 20s.
[source:businesstech]
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