{"id":849430,"date":"2026-03-01T11:00:00","date_gmt":"2026-03-01T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=849430"},"modified":"2026-03-01T11:29:01","modified_gmt":"2026-03-01T09:29:01","slug":"how-much-you-need-to-save-to-retire-comfortably-in-south-africa-2","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/849430\/how-much-you-need-to-save-to-retire-comfortably-in-south-africa-2\/","title":{"rendered":"How much you need to save to retire comfortably in South Africa"},"content":{"rendered":"\n

The average formally employed South African would need to save between R2,425 and R17,158 every month to retire comfortably, depending on their age when they start and savings strategy. <\/p>\n\n\n\n

The latest 10X Retirement Reality Report shows that only 6% of South Africans are on track to retire comfortably.<\/p>\n\n\n\n

Household Saving Rate in South Africa decreased to -1.20% in the third quarter of 2025 from -1.10% in the second quarter of 2025.<\/p>\n\n\n\n

A negative household savings rate means that, on average, households are spending more than their disposable income. <\/p>\n\n\n\n

This indicates that consumption is financed by dipping into existing savings, selling assets, or increasing debt.<\/p>\n\n\n\n

With the country\u2019s poor savings rate, many workers face the prospect of working far longer than expected.<\/p>\n\n\n\n

Kanyisa Mkhize, CEO of Sanlam Corporate, warned that most working South Africans may have no choice but to keep working until they are well into old age.<\/p>\n\n\n\n

Mkhize highlighted a major disconnect between what people expect and what is financially realistic. \u201cThe consumer portion of a Sanlam study showed that respondents expected to retire comfortably at 60,\u201d she said. <\/p>\n\n\n\n

\u201cHowever, a separate piece of work by Sanlam Corporate showed that South Africans, on average, may need to work a full two decades past the normal retirement age to maintain their lifestyle.\u201d<\/p>\n\n\n\n

According to Marnus Mostert, a franchise principal and financial adviser at Consult by Momentum, many people feel overwhelmed when they first see how much they need to save. <\/p>\n\n\n\n

\u201cWhen it comes to South Africa\u2019s savings culture, I don\u2019t think the issue is as generic as it\u2019s often portrayed,\u201d he said. <\/p>\n\n\n\n

\u201cYes, starting too late, lifestyle inflation, expensive vehicles, and instant gratification all play a role,’ he said.<\/p>\n\n\n\n

“But the bigger gap, in my view, is that both individuals and advisers underestimate what good, out-of-the-box planning can achieve with the money people already have.\u201d<\/p>\n\n\n\n

What you need to earn<\/h2>\n\n\n
\n
\"\"<\/a>
Marnus Mostert, a franchise principal and financial adviser at Consult by Momentum<\/em>. Learn more here<\/strong><\/a><\/figcaption><\/figure><\/div>\n\n\n

To put the numbers into perspective, Statistics South Africa\u2019s latest Quarterly Employment Survey shows that the average salary for formally employed, non-agricultural workers has reached a record high of R29,490 a month.<\/p>\n\n\n\n

For the purpose of the article, this can be rounded to R30,000 or R360,000 a year, which serves as a useful benchmark for income replacement in retirement.<\/p>\n\n\n\n

Using realistic assumptions\u2014a retirement age of 65, a real investment return of 9%, and a required retirement income of R360,000 a year in today\u2019s money\u2014the difference between starting early and starting late becomes clear.<\/p>\n\n\n\n

If someone starts saving at 25 and only increases their contributions by 5% a year, they would need to put away about R5,500 a month. <\/p>\n\n\n\n

Starting at 35 pushes that number to roughly R9,200 a month, while waiting until 45 means needing more than R17,000 a month to reach the same outcome.<\/p>\n\n\n\n

However, Mostert argued that smarter contribution strategies can dramatically lower the initial burden. One effective approach is committing to a higher annual savings increase.<\/p>\n\n\n\n

If contributions grow by 10% a year instead of 5%, the required starting amounts fall sharply. A 25-year-old could start at about R2,425 a month, a 35-year-old at roughly R4,900, and a 45-year-old at around R11,300.<\/p>\n\n\n\n

What you need to save, assuming a 5% increase in what you save per year<\/h2>\n\n\n\n
<\/th>Age 25<\/th>Age 35<\/th>Age 45<\/th><\/tr><\/thead>
Retirement age <\/strong><\/strong><\/td>65<\/td>65<\/td>65<\/td><\/tr>
Income required per annum (real terms)<\/strong><\/td>R360,000 (R30,000pm)<\/td>R360,000 (R30,000pm)<\/td>R360,000 (R30,000pm)<\/td><\/tr>
Investment yield (%)<\/strong><\/td>9%<\/td>9%<\/td>9%<\/td><\/tr>
Annual increase in savings (%)<\/strong><\/td>5%<\/td>5%<\/td>5%<\/td><\/tr>
Monthly savings required (to
retirement)<\/strong><\/td>		R5,512.95<\/td>R9,219.78<\/td>R17,157.66<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

What you need to save, assuming a 10% increase in what you save per year<\/h2>\n\n\n\n
<\/th>Age 25<\/th>Age 35<\/th>Age 45<\/th><\/tr><\/thead>
Retirement age <\/strong><\/strong><\/td>65<\/td>65<\/td>65<\/td><\/tr>
Income required per annum (real terms)<\/strong><\/td>R360,000 (R30,000pm)<\/td>R360,000 (R30,000pm)<\/td>R360,000 (R30,000pm)<\/td><\/tr>
Investment yield (%)<\/strong><\/td>9%<\/td>9%<\/td>9%<\/td><\/tr>
Annual increase in savings (%)<\/strong><\/td>10%<\/td>10%<\/td>10%<\/td><\/tr>
Monthly savings required (to
retirement)<\/strong><\/td>		R2,425.08<\/td>R4,930.85<\/td>R11,271.19<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

\u201cThis can be positioned as a practical hack for those who don\u2019t have sufficient cash flow early in their careers,\u201d Mostert said.<\/p>\n\n\n\n

While a 10% annual escalation becomes steeper over time, it often aligns naturally with career progression, promotions, and income growth.<\/p>\n\n\n\n

In this way, retirement contributions grow alongside earning power, making the strategy more realistic and sustainable.<\/p>\n\n\n\n

Another powerful, and often overlooked, lever is reinvesting tax refunds. Section 11F of the Income Tax Act allows retirement fund contributions of up to 27.5% of taxable income to be tax-deductible, meaning part of each contribution is effectively funded by SARS.<\/p>\n\n\n\n

Reinvesting that tax refund back into a retirement plan can significantly boost long-term outcomes.<\/p>\n\n\n\n

As an example, if a 25-year-old contributes R2,425 a month, increases that amount by 10% a year, and consistently reinvests all tax refunds until age 65, they could end up with about 31% more money at retirement.<\/p>\n\n\n\n

That translates into a meaningful jump in retirement income, from roughly R30,000 a month to about R39,300, purely through discipline and smarter use of money already being returned by the tax system.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

This is how much the average formally employed South African would need to save every month to retire comfortably.<\/p>\n","protected":false},"author":92,"featured_media":834152,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[16942,853],"class_list":["post-849430","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-consult-by-momentum","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849430","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=849430"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849430\/revisions"}],"predecessor-version":[{"id":852591,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/849430\/revisions\/852591"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/834152"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=849430"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=849430"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=849430"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}