HOW MUCH DO YOU NEED TO RE­TIRE?

Weekend Witness - - Money -

A READER wants to know how much he needs to re­tire com­fort­ably. He wrote:

I am a 53-year-old man. How much money do I need to be able to re­tire se­curely? Danelle Ester­huizen, le­gal spe­cial­ist for San­lam se­nior mar­ket ad­vice, re­sponded:

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, 47% of peo­ple who reach re­tire­ment age de­pend on fam­ily or friends for sup­port, and only six out of 100 can re­tire in­de­pen­dently of oth­ers.

Back to your ques­tion: the av­er­age per­son re­quires roughly 65% to 75% of his or 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.

The rea­son you need good ad­vice when sav­ing for re­tire­ment is that there are many re­tire­ment prod­ucts on the mar­ket. Some of them will suit you bet­ter than oth­ers. By get­ting the right ad­vice you can avoid paying too much tax, while en­sur­ing your funds are liq­uid. In other words, you can ac­cess your money when you need to with­out re­stric­tion. — Fin24. • Dis­claimer: Fin24 and Week­end Wit­ness can­not be held li­able for any in­vest­ment de­ci­sions made based on the ad­vice given by in­de­pen­dent fi­nan­cial ser­vice providers.

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