In Johannesburg, two families, the Gumedes and the Smiths\u2019, are navigating the joys and challenges of raising young children.\u00a0<\/p>\n\n\n\n
Both families are committed to building a stable future, but they\u2019ve taken very different approaches to retirement planning.<\/p>\n\n\n\n
Despite having financial constraints, Thabo and Lerato Gumede recognised the importance of retirement planning early on. <\/p>\n\n\n\n
With two children, school fees, and other living expenses, they knew saving wouldn\u2019t be easy, but they believed in starting small. <\/p>\n\n\n\n
Their financial adviser helped them to create a customised financial plan suitable for their current lifestyle, their budget and future goals. <\/p>\n\n\n\n
\u201cWe started with small contributions,\u201d says Lerato. \u201cIt wasn\u2019t much, but we knew it would grow over time.\u201d<\/p>\n\n\n\n
According to the Old Mutual Savings and Investment Monitor (OMSIM) 2024<\/a><\/strong>, findings, saving for a comfortable retirement is a top priority for working South Africans, aligning with the actions of the Gumedes.<\/p>\n\n\n\n With their financial adviser\u2019s help, the Gumedes chose Old Mutual\u2019s Max Investments Optimal Retirement Plan, a flexible option that best suited their finances and allowed for increased contributions as their income grew. <\/p>\n\n\n\n With tax-deductible contributions and tax-free growth, it was easy to start saving for their retirement. <\/p>\n\n\n\n *They chose to add a premium protection benefit to their plan, which meant that their premiums would still be paid if Thabo or Lerato became disabled during the policy term. <\/p>\n\n\n\n Thanks to the benefits of compound interest and consistent savings, they feel more confident knowing they\u2019ve taken steps towards a more secure future. <\/p>\n\n\n\n On the same street, Jason and Sarah Smith have yet to begin saving for retirement. <\/p>\n\n\n\n They\u2019ve focused on immediate expenses like school fees and groceries without the benefit of budgeting, feeling that they\u2019ll deal with retirement \u201clater.\u201d <\/p>\n\n\n\n The OMSIM 2024 findings show that many South African families, like the Smiths, underestimate how much they\u2019ll need for retirement. <\/p>\n\n\n\n As a result, families who delay saving often face difficult choices later, including cutting back on lifestyle essentials or relying on their children for support.<\/p>\n\n\n\n \u201cWe\u2019ve lost precious time because we will be starting our retirement savings much later than what is considered ideal\u201d says Sarah. <\/p>\n\n\n\n \u201cTo make up for the lost time and ensure a comfortable retirement, we will need to significantly increase our savings contributions. Even though we\u2019re starting late, having a plan is better than none, and it gives us hope that we can still reach our financial goals\u201d.<\/p>\n\n\n\n The stories of the Gumedes and the Smiths emphasises the key takeaway from the OMSIM 2024 report: starting early is important, as time is a powerful ally. <\/p>\n\n\n\n With compound interest, even small savings can grow substantially over time.<\/p>\n\n\n\n Marius Pretorius, Head of Marketing: Retail Savings and Income Product Solutions at Old Mutual, says, \u201cThere\u2019s no perfect time to start saving for retirement. Use Old Mutual\u2019s Retirement Calculator<\/a><\/strong> to find out how much you need. Start with what you can and increase your contributions as your finances improve.\u201d<\/p>\n\n\n\n Begin saving today to secure your financial future and live the lifestyle you want throughout your retirement.<\/p>\n\n\n\nThe Smiths: Delaying Retirement Planning<\/h2>\n\n\n\n
The Key Takeaway: Start Small, But Start Early<\/h2>\n\n\n\n