Could you live on a pension of less than R4 000 a month? This is the reality for almost half of all pensioners in South Africa, the recently released BankservAfrica Private Pension Index reveals.
The average pension is R3 834 a month – under three times the state old-age grant of R1 350 a month – the index shows.
The BankservAfrica index covers 85 percent of all pension payments that are made from one bank to another.
The number of private pensioners receiving more than R10 000 a month in their bank accounts was 15.8 percent of the total in January 2015 – nearly 50 percent up from January 2013, when these pensions accounted for 10.8 percent of the total.
However, the index reveals that, on average, pensions are very low: under half what employees in the formal sector take home each month.
There is little that people in retirement can do if their pensions are small and increasing at a rate lower than inflation.
But if your retirement is still ahead of you, you can make decisions now that will have a huge impact on what your retirement will look like.
You could, for example, boost your retirement savings by contributing more to a retirement annuity (RA) or employer-sponsored pension fund. Contributions to both are tax-deductible up to a certain amount. To boost your retirement savings and save on tax – before the tax year ends at the end of this month – you should consider making a once-off payment into your RA or pension fund, if you are able to.
To empower you to make the right decisions for the best outcome in retirement, Personal Finance has teamed up with Alexander Forbes to bring you the Ready Set Retire Conference with the theme “Live your best retirement”.
Find out what retirement entails and how to tackle your retirement planning to enjoy this phase of your life, with a good balance between your financial and physical well-being.
The one-day Ready Set Retire conference will be held on March 5 in Port Elizabeth, March 9 in Cape Town, March 11 in Johannesburg, and March 17 in Durban. The programme includes the following presentations:
* Tax planning for retirement – Jenny Gordon, head of legal advice for Alexander Forbes’s retail division;
* Investing for your goals – Gareth Johnson, head of individual investments at Investment Solutions;
* Understanding the realities of your retirement decisions – John Anderson, Alexander Forbes pensions industry expert;
* Getting your health cover sorted – Anthea Towert, Alexander Forbes health-funding expert;
* The retirement decision – Bruce Cameron, founding editor of Personal Finance, and a financial adviser from each region;
* Eating smart in retirement – Benny Masekwameng, celebrity chef and MasterChef South Africa judge; and
* Building a bridge between employment and retirement – Cathy Yuill, adult life coach.
Booking for the conference, through Computicket, is open. Tickets, which cost R250, include a light lunch.
The conference will be followed later in the year by the Ready Set Retire club dealing with topics in more depth. Visit www.readysetretire.co.za for More.