THE money TIP

CityPress - - Tenders -

It’s im­por­tant to know how much money you need in re­tire­ment in or­der to re­tire well. You’d think that savers would know this, but ac­cord­ing to Na­tional Trea­sury, only 6% of South Africans will have enough money to re­tire com­fort­ably.

This sober­ing statis­tic re­veals how, all too of­ten, South African savers miss the mark when it comes to their pen­sion.

“The re­al­ity is that sav­ing is hard for many South Africans at the mo­ment.

“Con­sumers are jug­gling debt, ris­ing food ex­penses, ed­u­ca­tion and other costs,” says Jeanette Marais, di­rec­tor of dis­tri­bu­tion and client ser­vice at Al­lan Gray.

Marais says a cap­i­tal sum of 17 times your fi­nal an­nual pre­tax salary will give you an in­come equal to about 75% of your salary at re­tire­ment age.

To find out if you are on track you can cal­cu­late it in the fol­low­ing way: af­ter work­ing for 10 years, you should have saved up dou­ble your an­nual salary; af­ter 20 years, five times your an­nual salary; and af­ter 30 years, 10 times your an­nual salary.

“This will bring you to the num­ber of 17 times your an­nual salary af­ter in­vest­ing for 40 years,” Marais says.

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