A story so many South Africans can relate to

Before he won the 10X Investments R1 million Retirement Annuity, Johan van der Berg was getting seriously worried that he would end up like so many other South Africans who have saved for years for retirement but end up with too little money to live decently.

Johan’s life has been changed this week after his name was chosen randomly from 17,830 entries to the competition designed to raise awareness about SA’s ticking retirement time-bomb.

Johan van der Berg

The 49-year-old father-of-one said he went from being very disappointed with the industry and extremely worried about his retirement prospects to being “over the moon”.

Before he won the competition, the resident of Pretoria North who works as a financial controller in the construction industry had been saving for retirement “for about 25 years”.

He had his savings invested in a Retirement Annuity with one of the well-known South African life companies, but things were not looking at all rosy.

Johan said his retirement fund was looking increasing inadequate as the years passed, quite unlike the promising predictions he was given when he opened the fund.

When Johan started investing in his RA, he was led to believe that he would retire on R5-6 million, which looked good to him then. But the projected riches have not materialised at all. Johan says the closer he gets to the policy’s maturity age of 55 the more it looks like he will be cashing out around R1 million, rather than the R5-6 million originally envisaged.

He was feeling a little desperate about his prospects for retiring in comfort and had started to look around for solutions.

Johan says he came across the R1 million competition when he visited 10X’s website while doing research on how to improve his retirement savings outcome.

To enter the competition 10X Investments asked members of the public to do the simplest of calculations on their website: enter your current age and let the 10X retirement calculator work out a couple of options on what you could expect the R1 million to look like come retirement age.

One calculation was for investing R1 million with the high-performing, low-fee provider itself (on the left of this illustration); the second was for investing R1m with an investment house that charges the South African average of 3%.

The 49-year-old Johan would have seen that he could expect a R1 million RA to grow to R2,159,182 invested with 10X Investments (in today’s money), or R1,589,781 with a competitor who charges the national ‘going rate’.

Johan is a classic example of what happens to so many people who trust blindly that the companies with well-known names (and big advertising budgets) will necessarily act in their customers’ best interests. Blind trust has cost so many diligent savers the peace of mind of a well-funded retirement.

10X Investments chief executive officer Steven Nathan, who founded the disruptive asset management company as an alternative in an industry that traditionally puts its own interests ahead of those of clients, says that unless people take charge of the process they are unlikely to get a good deal out of the industry.

Unfortunately, only one person could win the 10X R1 million, but the good news for other worried retirement savers is that there are usually many ways to improve your situation (and not all of them involve personal sacrifice).

Especially good news for those who are ready to take the leap and open a new retirement savings product or transfer an existing one across to 10X is the opportunity to pay no fees at all for the whole of 2020 (as long as they sign up before December 13 this year).

There are numerous contributing factors as to why so many South Africans are in Johan’s situation, feeling that their retirement plan has gone totally off track, but one of the most significant reasons is that people are simply not engaging with the retirement planning process. Instead, South Africans are putting off saving for “another day” or handing over control to a third party.

The truth is that retirement planning is not that complicated and there are many tools on the internet to help people get a grip of their own retirement savings journey. 10X Investments’ retirement savings and earnings calculators require just a few inputs to generate retirement savings and spending plans for individuals.

10X Investments will charge anyone who opens a new retirement product (or transfers an existing one to 10X) before December 13 this year no fees at all for the whole of next year (2020).

Read: Simple steps to avert your own retirement crisis  

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A story so many South Africans can relate to