The power of compounding and the need to preserve retirement savings

If you were to save R 1,000 a month over the course of a 40-year working life, increasing your contribution by 1% more than inflation each year and earning a 5% a year return, you would have saved R1.7m. But if you had cashed in your retirement savings after 20 years, you would end up with 75% less R440,000 - after 20 years of saving. This illustrates the power of compounding and the importance of preserving your retirement capital.