This tool shows you how much you need to save for retirement – so you can maintain your current lifestyle
Financial services firm 10X warns that high fees can cost you as much as 40% of your retirement.
“Fees are the single most reliable predictor of your investment’s performance. Paying a more expensive fee compounds over time, and could mean you end up with 40% less money when you retire, it said, noting that the industry average is 3%.
As an example, it noted that the after-inflation value of a R3,000 monthly contribution for 40 years, earning 6.5% real return per annum, amounts to R3.1 million, paying the industry’s average 3% fee. Paying a 1% fee, the value shoots up to R5 million.
“South Africa’s retirement landscape looks terrible,” said 10X Investments chief executive officer, Steven Nathan. Citing the National Treasury, he said that as many as 94% of South Africans can’t afford to retire.
“So how do we get South Africans to take retirement more seriously? We need to scare the living daylights out of them,” Nathan said.
“Another approach is to help them to take charge of their retirement journey, as well as to give them access to products that will give them the best chance of success,” Nathan said.
Nathan pointed out that the 10X formula for a healthy retirement is to save 15% of your salary for the duration of your working life (40 years) and invest in a balanced high-growth index fund, with low fees.
The company has a calculator to help customers structure a retirement plan, which can be found on the company’s website.
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