Retirement savings gap is widening

Planning for retirement matters now more than ever and can no longer be considered a luxury, but a necessity as the gap between what one has saved and what they need to retire comfortably is growing wider for many.

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A survey by Credit Suisse indicates that while nearly 80% of South African retirees receive a pension, it replaces only 19% of their last salary, far below the 59% average among Organisation for Economic Co-operation and Development countries.

With inflation and economic pressures increasing, this gap is becoming more pronounced, leaving many unprepared for their golden years, Jonathan Nel, technical head for life and invest at Growth House, says.

He says the earlier one starts saving for retirement, the more they benefit from compound growth. Delaying savings can reduce funds available when they need them most for retirement.