position , may allow you to delay your retirement by deferment , where effectively you say that you would like your savings to be parked until you are ready to start to take a pension ,” said Davison .
“ The longer you derive this income , the further your retirement savings will stretch when you are ready to ‘ hang up your boots ’ for good .”
4 . Know how much you need
A common question for people approaching retirement is “ Do I have enough savings ?” This is not an easy question to answer as everybody ’ s needs are different , and there are many factors to take into account such as your family situation , dependants , tax , state of health , debt , the kind of annuity you select at retirement and many others .
“ A good starting point is to aim for a pension that is about 70 % of the salary you were earning before you retired . This is on a gross basis , meaning before tax is deducted . To be able to afford a pension of this level , a 65-year-old male would need savings of about nine times their pre-retirement gross salary and a female about 8 % more capital than that ,” said Davison .
A brighter future ahead
Davison noted that the Retirement Gauge demonstrates that it is possible to accumulate around eight times the annual salary in savings for retirement – based on saving from age 30 to age 65 . “ Employees shouldn ’ t feel that it ’ s almost impossible to save for a comfortable retirement . Many people of all income levels are showing that it ’ s possible . That doesn ’ t mean it ’ s easy .
“ It takes careful planning , thinking about your future self and not just your current self and then having the discipline to stay the course . The financial decisions you make during your economically active years will determine the quality of life you are able to sustain in retirement ,” he said .
SA Real Estate Investor Magazine NOV 2022 171