Scaring the young into saving

I’m no military man. Never have been, never will be. But my daughter has, in recent days, taken to calling me Colonel.

It started when I managed to convince her about the virtues of a retirement annuity.

She started working this year after completing her studies in 2017.

We all know it’s almost impossible to convince 23-year-olds to start saving for retirement. They’re young, healthy, immortal, and living la dolce vita. And, don’t forget, broke. At 23, money is for spending.

I remember my 20s like it was three decades ago, so I have a reasonable idea of how my daughter’s mind works. When I initiated the conversation about starting a retirement fund, she nearly had a fit laughing. I must admit, with hindsight, I really did sound like an old geezer.

At 23, top priorities are clothes, make-up, socials, parties, weekends away and “borrowing” petrol money from dad three days before pay day. Told you I remember my 20s.

But I quickly got her attention when I mentioned that, when she gets her third-ever pay cheque end of this month, it’s a case of three down, 501 to go. Oh yes, do the math. From age 23 to age 65 covers a total of 504 pay cheques. Not a lot is it?

Now consider this: living to the age of 80 is not that improbable. But that means your retirement savings will be responsible for another 180 pay cheques.

Suddenly, my daughter was all ears.

It just so happens that I received a KFC menu from 1976 from a friend recently. Apparently it was fairly widely distributed on social media. Well, it fascinated us. Back then, a Streetwise Two was called a Snack Box and it cost a whopping 69 cents. The 21-piece Barrel would set you back R4.29.

Again, I did the math. Turns out prices have increased roughly fifty-fold in the past 42 years.

Should price increases in the next 42 years mirror the previous 42, a Streetwise Two would be around R1 600 when my daughter reaches retirement age. And a Barrel: R12 500.

“That’s a finger-licking scary thought, Colonel,” my daughter said.

She has an appointment with a financial planner next week.