The 10X SA Retirement Reality Report


67% have no retirement plan

Author: www.wealthplanning.co.za
Article by 10x Investments 

This year, a total of 67% of respondents in the Brand Atlas survey indicated they had no retirement plan, or just a vague idea of one, 8% more than the number reported in 2018.  

Almost half the respondents (46,2%) said they were not saving for retirement at all, with the overwhelming majority (91%) blaming insufficient means or other priorities.  

Among those who say they do have a plan, nearly half didn’t know what fees they paid. Another 16% said there is no fee. The fee paid on an investment might be difficult to find (and almost impossible to understand) but you can be sure there will be a fee.

A key issue that cropped up again and again in the data from which this report was compiled was that mounting financial pressure is preventing people from saving for retirement. This should surprise no one. South Africa’s financial stress is palpable, it's understandable that many people are also struggling with their personal finances.

The report also shows that too many South Africans think of retirement saving as a low priority expense, a luxury even, rather than an essential investment.

Equally bad is the news that things are also very bad for those who say they do have some sort of retirement plan (roughly half): nearly 4 out of 5 of them accepted that they would need to keep earning some income after they had retired. Against the backdrop of South Africa’s runaway unemployment, it is hard to imagine how this will be possible.

The report confirms last year’s findings that more women are in a precarious financial situation than men. A worrying statistic that is getting notably worse is the percentage of women who neither save nor invest: this is up to 42% from 36% in 2018.

This report also reinforces RRR18 findings that although in general women are better savers than men they are less likely to invest their savings for growth, which is the most effective way to grow money over the long term.

The report notes that stark differences in people’s financial situation continue to present along racial lines, which is not surprising considering South Africa’s history. These differences are often described as cultural but frequently they are circumstantial. The report also touches on so-called Black Tax, the additional financial burden of supporting family and friends that the (largely black) emerging middle class has in South Africa, which is a reality for many.

The report was expanded this year to include a chapter on the role of employers in South Africa’s retirement crisis. More than half of those survey respondents who had some sort of a retirement plan had at some point belonged to a corporate retirement savings fund, yet few knew much about the funds they were paying into. More than 60% of them said they knew little or nothing about the fund or were not interested, with 37% wishing they knew more.

The report includes links to a number of free downloadable educational e-books that include information and simple solutions.

We hope that the release of the Retirement Reality Report 2019 will open people’s eyes and promote action towards addressing the causes of this looming retirement crisis.  

View and download the full report here.

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