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Just Retirement survey insights – Dire need for consumer education

According to the “Just Retirement Insights 2019”, guaranteed income in retirement remains the number one preference of South African retirees. The study is a comprehensive review and commentary based on face-to-face interviews with over 520 pre-retirees and retirees.

Some of the key findings are:

81% of respondents prefer a secure monthly income to cover expenses in retirement, up 2% from 2018.
Eight out of ten respondents said that they set and worked towards financial goals, while 60% of respondents acknowledged putting more thought and planning into their finances (a 20% increase from 2018).
Half of the respondents said they would rely on children or grandchildren should they run out of money, yet paradoxically they also shared the belief that it is important to leave an income legacy for the next generation.
Results revealed a misplaced optimism about the amount of retirement savings required to cover their expected lifetime. 80% have less than R2 million in retirement savings and more than half of these respondents expect a monthly income in retirement that is significantly higher than the sustainable income that can be purchased in the market.
While two in five respondents cannot afford to lose any retirement fund money before it seriously affects their retirement plans, almost three quarters claimed they will not seek any form of professional financial advice.

“Our key concern rises from this latest study,” said Just CEO Deane Moore, “is the high proportion of people approaching retirement that has not saved enough, yet expect an unrealistically high level of income from their existing retirement pot. Few people realise that they can sustain a 2,5% p.a. a higher level of income in retirement, and guarantee this for life, by using a life annuity or a lifetime income option within a living annuity. It highlights the important role of careful planning to help make informed decisions around the effective use of limited resources.”

The fact that 75% of the participants indicated that they will cope without professional financial advice is a real concern. The very need for this is reflected in the other outcomes of the survey, particularly their expectations of an income versus the current reality. As the song goes: “When will they ever learn…?

Click here to download the Just Retirement Insights 2019 media release.

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