The second 10X Retirement Reality Report (RRR19) reveals the worsening state of South Africa’s private retirement savings crisis and its pending impact on government resources in the coming years.
The RRR19 – the findings of a survey of more than 15-million economically active South Africans – shows that 67% of people have no retirement plan at all or just a vague one.
The report, commissioned by 10X Investments, reveals a profound lack of understanding among existing clients of the retirement savings industry regarding what they have actually saved and what they will need to have saved to preserve their lifestyle in retirement.
The poll further highlights some worrying trends across South African demographics:
72% of those who do have some sort of a plan are concerned that they will not have enough money saved to live on after they retire
77% of those who do have some sort of a plan accept that they will need to continue earning an income after they retire
72% of women across all demographics either have no retirement savings plan at all or only have a vague plan.
Founder and CEO of 10X Investments, Steven Nathan, said: “South Africa’s retirement time bomb is ticking ever louder. We all need to urgently confront this reality, to prevent an even greater proportion of South Africans slipping into poverty at retirement.”
The report found that a large number of respondents believe that setting themselves up for a decent retirement can be done in a relatively short time, which is one reason so many people leave it too late.
More than a third of South Africans believe that a comfortable retirement can be achieved through saving for just 24 years or less, the survey found.
10X Investments noted that cashing out retirement savings when changing jobs is one of the classic retirement saving mistakes.
“Cashing out means starting again from the beginning and, far more damaging, losing out on the compound growth that early savings generate over the years, which is one of the real game changers in long-term saving.”
The power of compounding