Some dream of retirement as a time for beach walks, travel, quality moments with loved ones, and finally pursuing long-neglected passions. Yet for many, stopping work altogether remains out of reach.
The difference, says Khwezi Jackson, client relationship manager at 10X Investments, often comes down not to income or privilege but decades of financial planning – or the lack thereof.
“There’s nothing more sobering than speaking to a 60-year-old whose retirement fund totals just R100,000,” Jackson says. “What do you say to someone facing the end of their working life with no safety net?”
While it’s easy to blame the investment industry’s high fees, overwhelming choices, or underperforming portfolios, Jackson stresses the responsibility ultimately lies with individuals. “We need to take a more active role in managing our retirement savings.”
This sentiment is underscored by the latest 10X Investments Retirement Reality Report, which found that only 6% of South Africans are on track to retire comfortably. The report highlights a significant retirement savings crisis, with the majority likely to face financial difficulties in their “golden years.” Even among those who do plan, confidence is low due to tough economic conditions.
The report explains that a typical earner saving 15% of their income from the start of their career, while preserving their savings when changing jobs, needs roughly 40 years to accumulate enough for a comfortable 30-year retirement — assuming a 5% return after costs.
Experts recommend aiming to replace 60-75% of your working income in retirement.
For example, if you earn R40,000 per month today, you should plan for an income between R24,000 and R30,000 per month in retirement, adjusting for inflation over time.
A good estimate is to multiply your monthly salary by 200. The total you get is the amount you’d need if you retired today at a 75% replacement ratio.
Key Steps to Secure Your Retirement
Re-evaluate your investment strategy
Jackson warns against assuming that simply belonging to an employer’s provident fund is enough. “You need to understand how your fund works, what you’re invested in, and whether it aligns with your goals,” he says.
He urges South Africans to regularly check their balances and ensure their investments match their life stage. “Confidence in your retirement plan comes from staying informed and making intentional decisions, not passively hoping.”
Avoid cashing in retirement savings
About 56% of workers cash in their retirement savings when switching jobs, a move Jackson cautions against. Early withdrawals mean losing decades of compound growth, which can severely impact retirement outcomes.
He advises evaluating pension policies carefully and considering fund transfers to consolidate savings while assessing fees and benefits.
Manage debt wisely
Carrying debt into retirement, especially mortgages or personal loans, can strain finances. Jackson recommends prioritising debt repayment while still employed, balancing this with saving for retirement.
“Small, consistent efforts to reduce debt and build savings can have a major impact on your financial health,” he notes.
