Most South Africans can’t afford to retire: ‘You have to plan from paycheque one’ – Certified Financial Planner
About 94% of South Africans are not financially able to stop working at the usual retirement age.
Retirement planning, breaking into piggy bank savings. Picture: 123rf.com
Wasanga Mehana (in for Africa Melane on 702 and CapeTalk) speaks with Prem Govender, a Certified Financial Planner at the Financial Planning Institute SA.
Listen below:
South Africans are facing a crisis, with only 6% of the population financially prepared to stop working at the usual retirement age.
Millions of South Africans will have to face the reality of working well into their 70s and 80s.
A combination of low savings, poor financial advice, and early retirement withdrawals means many South Africans’ financial status is worse than they may realise.
Govender says part of the problem is that South Africans do not start planning for retirement early enough.
“You have to plan for retirement from paycheque number one. You may think it is a long way off, but it is only 480 paycheques away from the day you start working.”
- Prem Govender, Certified Financial Planner - Financial Planning Institute SA
She adds that early two-pot retirement withdrawals are setting people much further back than they realise.
RELATED: In your 20s? Why retirement planning should be a top priority
Taking money out early will greatly reduce your chance of retiring on time.
"...two pot... is being abused. People are not taking the money out of necessity; they are taking it out for consumerism.”
- Prem Govender, Certified Financial Planner - Financial Planning Institute SA
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