Get ready: Government plans to FORCE you to save for your retirement
“The only sure things in life are death and taxes.” Here in SA, this common saying could be amended soon to include ‘retirement savings'. This comes as government announces its looking to force people to preserve their retirement benefits. Here's what it's planning to do…
Are retirement savings at the bottom of your financial priority list?
You’re not alone. After all, it’s no secret that South Africans’ retirement savings are in trouble.
So much so that Sanlam's Benchmark Symposium
shows the average retiree depletes his retirement lump sum in just three years – if he even saved enough for that.
That’s why government is moving to enforce pension savings from 2015, says Bizcommunity
This means you’ll be forced to preserve your retirement benefits by doing away with the option to take your retirement benefit as a cash lump sum or transfer the money into a preservation fund when you resign from a company.
Warning: You desperately need to push ‘retirement savings’ to the top of your financial priority list!
Currently, only 10% of employees under the age of 40 preserve their retirement benefits when leaving a job. That’s a problem when you consider that you have just 20 odd years of saving left until retirement, says Bizcommunity
So while government’s plan to force you to save sounds harsh, it’s for your benefit especially since you’re probably not saving enough for your retirement anyway.
Here's how much you SHOULD be saving for your retirement each month...
In fact, even if you’re one of the few who’s diligently stashing away 12% to 15% of your income each month for retirement, you’ll need to up that to 25% if you want to keep your current lifestyle – or improve it – when you retire.
People in the developed world are living longer, so retirement savings now need to support an individual for 30 years – not the 10 to 15 years you typically save for, says Moneyweb
Bottom line: If you haven’t already done so, speak to your financial advisor to make sure you’re putting away enough each month for your retirement.