What South Africans fear more than death

A survey from Debt Rescue shows that 40% of South Africans fear retiring more than dying.

The survey, which had just under 2,000 South African respondents between 25 and 65, highlighted the apprehension of South African citizens to save.

It also reveals the fears and challenges South Africans face in saving for retirement, stressing concerns such as the high cost of living, unemployment, and personal debt.

According to the Debt Rescue Survey, 59% of polled admitted to being unprepared, with no savings or plan for retirement.

On the other end of the scale, only 4% felt fully geared for retirement.

This aligns with the Old Mutual and Savings Investment Survey, where only 33% of respondents said securing their investments and 34% said creating an emergency savings fund was a priority. This is despite 47% of respondents in the Old Mutual Survey saying that a comfortable retirement is their primary reason for saving.

“This means that over half of South African adults will either need to retire later than planned, not be able to retire at all or will need to rely on their families to support them through their golden years,” says
Neil Roets, CEO of Debt Rescue.

However, looking more positively, half of those in the Debt Rescue participants said they have some form of plan or annuity.

However, only 40% of the respondents said they were confident that their retirement savings would be enough for a comfortable lifestyle, with only 24% being very confident.

The biggest roadblocks for retirement were mainly the high cost of living, with 63% stating that it is their biggest obstacle.

This was then followed by unemployment or unstable income (16%) and high personal or household debt (12%)

However, looking positively again, 51% of respondents said that they strongly understand the retirement savings options available to them, including pension funds, retirement annuities and provident funds.

Regarding funding mechanisms, personal savings (28%) and employer-provided pensions (24%) were
the main sources of retirement funding.

However, Roets said that it is a concern that only 21% of people start saving for retirement in their 20s, which drops to 13% in their 30s and 4.3% in their 40s.

He notes that it is far better for South Africans to save for retirement as soon as possible.

“The primary reason is that the earlier you start saving for retirement, the sooner you can begin capitalising on the effects of compounding returns. There are also many immediate tax benefits, and if you are employed, you can begin saving for retirement by leveraging your employer’s retirement plan,” he said.

“These plans reduce your taxable income, investments grow tax-deferred, and you can double the money through employer matching contributions.”

Although South Africans are struggling to meet daily costs, he stressed that a small, smart investment can still help South Africans grow their money.

“A sound financial management plan is another way to gain greater control over your finances, and cultivating a habit of saving for the future, even starting off with just a few rands a month, can set you on the road to a comfortable retirement,” he added.

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