• Change of culture needed

    The right leadership will help SA shed its culture of violence, says Mandi Smallhorne.

  • 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

Loading...
See More

How much do I need to retire?

Jan 21 2013 11:33
pension, retirement


Related Articles

Retiring in comfort

Best retirement options

Pension timeframe

Harsh retirement realities

Recipe for a successful retirement

A home not enough for retirement

 
A Fin24 user wants to know how much he needs to retire comfortably. He writes:

I am a 53-year-old male.

How much money do I need to be able to retire securely?

Danelle Esterhuizen, legal specialist for Sanlam Senior Market Advice, responds:

It is extremely difficult to answer a question like this with insufficient information. The starting point would be for a financial adviser to prepare a proper needs analysis with your personal information.

The reality in South Africa is that 16% of retired people are fully dependent on state pensions; 31% of people who reach retirement age have to keep on working to earn a living; 47% of people who reach retirement age depend on family members or friends to support them financially; and only 6 out of 100 South Africans can retire independently of others.

Back to your question: the average person requires roughly 65% to 75% of his/her last salary to live comfortably after retirement. If you still have outstanding debt and expect higher medical expenses, you might need to increase this figure. If you want to preserve your capital, it also influences the calculation.

A rough rule of thumb is that you need 15 times your current annual salary to retire on (if you retire at 65), but it is of the utmost importance that you obtain advice from a qualified financial adviser who can take your personal circumstances into consideration.

The reason you need good advice when saving for retirement (or just saving in general) is that there is a multitude of retirement products available in the market. Some of these will fit your personal circumstances and preferences better than others.

By getting the right financial advice you can avoid paying too much tax, while ensuring that your funds are liquid. In other words, you can access your money when you need to without any penalty or restriction.

 - Fin24

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

* Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

retirement  |  money clinic

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
15 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

20 self-made teenage millionaires

From selling lemonade to building webpages, these young entrepreneurs made a pretty fortune!

 
 

Luxury living

Top 10 richest musicians of all time
10 most expensive cars In the world
10 of the most expensive things that will leave your jaw hanging!
Seven of the most expensive children's toys ever made

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...