Most South Africans can’t afford to retire. The fact is that the majority rely heavily on income from a salary because their pension income is insufficient to support them.
According to the 2019 Old Mutual Savings and Investment Monitor, a large number of South Africans earning at least R15 000 a month were delaying retirement because they simply could not afford it.
“Including this demographic into our study reveals the impact that many households suffer because they are financially underprepared for their retirement,” Lynette Nicholson, research manager at Old Mutual said. “While one’s sunset years are supposed to be a time to kick back and enjoy the pleasures that life has to offer, this does not appear to be the case for many of those we surveyed.
What our study shows is that as many as 92% continue to work, because they are dependent on additional income to make ends meet”. For nearly 80% of respondents the monthly contribution from a pension makes up only 27% of their income, with other investments or savings contributing only 7%.
Nicholson shared that this fact highlights the importance of proper financial planning in one’s productive years. For many, a company pension fund is proving insufficient to support them in retirement. She said that it is therefore essential to speak to a professional financial adviser who is able to help consumers navigate along a path that reduces this financial pressure later in life.
Click here to read the OM media release that shares more about these insights.