Retirement crisis: Majority of South Africans will work till they drop dead
Throughout their careers, most individuals fail to generate sufficient income to sustain their families, let alone set aside funds for their retirement.
Very few South Africans can actually retire on their own terms. Image: iStock.
The majority of South Africa’s working class will likely need to work till the day they die. This is because they cannot afford a proper retirement plan.
According to 10X Investments’ latest Retirement Reality Report 2023/2024, only 6% of the country’s population is on track to retire comfortably.
What is even more alarming is that 30% of people over the age of 50 years have no retirement plans in place either.
The report also found that even the South Africans who do have a retirement plan in place, do not feel confident that they will be able to comfortably support themselves financially.
Below poverty line
Experts say that the results from the report are not surprising considering that just under half of the country’s population is living below the poverty line, according to Stats SA.
Throughout their careers, most individuals failed to generate sufficient income to sustain their families, let alone set aside funds for their retirement.
The report also found that women have consistently been rated lower than men in most metrics concerning financial well-being and retirement planning.
The fact that Statista in 2021 reported that about 7.6 million households in South Africa were led by women, makes this even more concerning.
Tobie van Heerden, Chief Executive Officer for 10X Investments, said that fewer people are able to retire on their own terms.
Confident for retirement
The report also indicated that only 35% of the retirees who had saved for retirement indicated that they were fairly confident that their savings would last.
“Notably, 2% of retirees indicated that they had already run out of savings, meaning they were relying either on family or state support,” the report read.
Per the last budget speech, pensioners in South Africa over the age of 60 and without a pension plan receive a R2090 grant from the South African Social Security Agency (Sassa).
Numbeo, a crowd-sourced global database, estimates that a single person would need about R8,875 to live comfortably in South Africa.