How much you need to save in your 30s to retire comfortably in South Africa

South Africa faces a growing crisis in its national savings rate and retirement planning, and your thirties is a critical time to start saving if you haven’t started already.

A report from 10X Investments shows that only 6% of South Africans are ready to retire comfortably.

This alarming statistic highlights a persistent issue—most people don’t have a proper plan for retirement or don’t think their savings will be enough.

Economic challenges exacerbate the problem, leaving many unable to save for the future.

Approximately 70% of people without a retirement plan say they simply don’t have enough money to save.

High unemployment, household debt, and the pressure of meeting immediate financial needs often overshadow long-term planning.

According to Deloitte’s South African Investment Management Outlook, the country’s national savings rate is a mere 0.5%, among the lowest globally.

This troubling trend underscores the urgency of addressing systemic economic challenges to foster a culture of saving.

The government has made some changes to help South Africans facing financial strain.

In September 2024, a new “two-pot” pension system was introduced, allowing individuals to access a portion of their retirement savings before retirement under specific conditions.

However, within six weeks of its implementation, the South African Revenue Service reported payouts amounting to R21.4 billion, reflecting the dire financial needs of many citizens, further risking their future financial health.

Additionally, the practice of cashing in retirement savings when changing jobs further undermines financial security—a choice made by 56% of individuals, according to the 10X report.

Even among those who have saved for retirement, only 35% feel confident their funds will last through retirement.

To solve these problems, people need better financial education, and the government needs to keep making helpful changes. However, individuals also have to take charge of their savings.

How much you need to save

According to Marnus Mostert, a franchise principal and financial adviser, achieving a comfortable retirement requires careful planning.

He suggests saving to replace 75% of your current salary by the time you retire. For someone starting at age 35, this means allocating nearly 21% of their gross monthly salary toward retirement savings to reach this goal by age 65.

These scenarios assume a current gross salary of R40,000 and a targeted retirement income of R30,000 per month (adjusted for inflation), which would require disciplined saving and investment.

This scenario also assumes a 10% annual investment growth rate and inflation-linked increases until retirement.

The tables below show how much you need to save in your 30s to retire comfortably in South Africa, as outlined by Mostert.

Advice and Product Specialist at PSG Wealth, Robyn Laubscher, told BusinessTech that retirement planning is essential at every stage of life, but the focus will evolve as circumstances change.

In your thirties, for example, you may be navigating milestones such as marriage, parenthood, or homeownership.

This period is an opportune time to reassess your investments and adopt a diversified portfolio that balances growth and stability.

Laubscher advises balancing retirement savings with other financial obligations, such as saving for children’s education, without neglecting long-term goals.

Additionally, reviewing insurance needs is critical during this stage of life. Adequate life and disability insurance can protect your family’s financial future, providing peace of mind as you juggle multiple responsibilities.

Retirement planning is not a one-time task but an evolving process that requires regular attention and adjustments.

South Africa’s low savings rate and inadequate retirement preparedness pose significant challenges, but proactive steps can pave the way for a more secure future.

By starting early, committing to consistent savings, and adapting plans to life’s changes, individuals can improve their chances of achieving financial stability in retirement.