TIME TO TAKE CHARGE OF YOUR RETIREMENT SAVINGS

continuous changes to the South African labour market, growing unemployment, and economic and social factors are wreaking havoc with investors’ retirement plans.

Given the flat investment market of the past five years, South Africans who are currently retiring are likely to find their assets worth about 15% less than they would have been in normal investment conditions, says Deane Moore, CEO of retirement income specialist JustSA. This is based on an average return of 6.5% per annum over the past five years in South African balanced funds.

“In normal investment markets, people would expect CPI + 5 percentage points per annum from balanced funds,” he says. With CPI at around 5% per annum over the last five years, it means people would have expected investment returns of 10%.

Of course, the local retirement landscape has also changed fundamentally in the past two to three decades – defined benefit funds have shifted to defined contribution funds, placing the risks on fund members