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INSIDE YOUR MARCH ISSUE BUDGET SPEECH Despite its reflection of SA’s economic difficulties, the 2024/24 Budget also holds opportunities for FAs. Page 9 - 10
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First for the professional personal financial adviser
31 March 2024
Majority of cash-strapped South Africans unable to retire comfortably
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are key to closing the expectationreality gap – in their long-term interests South Africans need to be better informed on the importance of saving, the power of compound interest, the consequences of not saving, the additional disadvantages that women need to overcome, and the impact of costs,” says Van Heerden.
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outh Africa is sitting on a retirement time bomb, with only 6% of the country’s population on track to retire comfortably. This is according to the sixth edition of the recently released 10X Investments Retirement Reality Report 2023/2024. LISTED PROPERTY The report is based on the findings Is now the time of the 2023 Brand Atlas Survey. Brand Atlas tracks and measures the to view the listed lifestyles of the universe of 15,4 million property sector economically active South Africans – in a whole new defined as those living in households light? We speak to with a monthly income of more than some experts to get R6 000, aged 16+, with internet access, the views on the through online completion surveys. benefits of plunging This year’s survey shows that there into this asset class. has been little fundamental change in South Africans’ inclination or ability Page 12 - 15 to plan for retirement in comparison to findings from last year’s report. The 10X Investments Retirement Reality ESG INVESTING Report 2023/2024 found that the If you thought it majority of South Africans have not formally was just a fad, planned for retirement, and those who have planned are not confident they are on track it’s time to think to be able to support themselves for the long again. Investors term, considering inflationary pressures and should all be the economic climate. This comes at a time considering making when half of the South African adult population ESG an integral (49.2%) is living below the poverty line, and strategic according to Stats SA. part of long-term Consumer confidence, as measured by the FNB/BER Consumer Confidence Index, has investments. been negative since the last quarter of 2019. Pg 23 When Covid-19 hit, it dropped to a record -33 MoneyMarket_Feb 2024 Tax free.pdf 3 2024/02/21 12:40:29
Planning for retirement About half of respondents who had a retirement plan indicated that their plans were ‘probably’ or ‘definitely’ on track, with some variation across age groups. Significantly, 29% of people over 50 indicated that their plans were ‘definitely not’ or ‘probably not’ on track. According to 10X, it is extremely difficult to correct any deficit in savings after reaching 50, and requires at least 30%-40% of a monthly salary to be invested into retirement savings in order to comfortably retire. Almost three quarters of respondents (72%) whose plans were not on track gave ‘I am not able to save enough’ as a reason. This ties in with reasons given for not having a retirement plan in the first place: 70% of respondents without a plan agreed with the sentence: ‘I cannot afford to save, I have nothing left over at the end of the month’.
“29% of people over 50 indicated that their plans were ‘definitely not’ or ‘probably not’ on track”
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points, recovered to about -10 points in 2021, but dropped again, hovering around -20 points in 2022 and the first half of 2023. Tobie van Heerden, Chief Executive Officer for 10X Investments, says that in comparison to 2022’s survey, the 2023/24 report found an increase in the number of people recognising the importance of having a retirement plan in place. “The difference between what South Africans expect their retirement to look like and the realities faced by those in retirement and approaching it, cannot be underestimated. Knowledge and information
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