WEALTH & RETIREMENT
A
recent report from Genesis Analytics in partnership with the Financial Sector Conduct Authority ( FSCA ) showed that 90 % of South African retirees cannot maintain their standard of living prior to retirement , and two-thirds of members have less than R50,000 in their retirement fund .
“ Burying one ’ s head in the sand and hoping for the best is not a solid retirement funding strategy ,” says Janine Horn , a financial adviser from Momentum
The FSCA noted that despite the average value of benefits being paid out increasing since 2017 , the average contribution to pension funds has remained relatively stable at around R900 per month in real terms .
When comparing pension fund coverage , 92 % of workers in the public sector have a retirement product , whereas roughly only 50 % of workers in the private sector have a retirement product , said the FSCA .
The report details that a large portion of South Africans ( 25 %) expect the same standard of living after retiring , while 79 % of respondents worry about having enough to live on after they retire , and 74 % expect to need some additional income , the financial services firm said
75 % replacement ratio
To retire comfortably depends on personal circumstances , however a 75 % replacement ratio is considered a reasonable target for members in general , said Vickie Lange , head of Alexforbes Research .
188 OCT 2022 SA Real Estate Investor Magazine