The Sanlam Benchmark Survey 2023 found that pressing financial concerns and little or no room for retirement savings could mean the concept of retirement is a thing of the past. indicates that
The survey revealed that 75% of respondents (sample of 500 full-time employees) contribute to some form of retirement benefits, and 25% do not.
Sanram Corporate CEO Kanisa Muhize said 30% of individuals were unsure how much to save, 47% lacked clarity on which pension products to invest in, and 48% He said it was notable that future medical assistance contributions were not included in the policy. financial planning.
As many as 40% say that if they don’t use a retirement fund, it’s because their current financial needs are too great and they need the money now. The purpose of the proposed two-pot retirement plan, which aims to provide early access to retirement savings, is to address this. This aims to balance long-term retirement savings goals while providing access for emergencies and other unforeseen events. However, the implementation date has already been pushed back once from March 1 this year to March 1, 2024, warning the industry is running out of time to plan properly.
The survey also found that 63% of South Africans are currently worried about their finances and 87% say they are feeling financially stressed. For 58% this affected their physical and/or mental health.
This result is not surprising. DebBusters data shows that: Nominal income is 2% higher than in 2016, and cumulative inflation is 40% higher, meaning people’s take-home pay is 38% lower in real terms than seven years ago. In the same period (2016 to he 2023), petrol prices have almost doubled and electricity bills have risen by 90%.
The idea that retirement may be a pipe dream for many is supported by a survey showing that 1 in 5 respondents believe they may never retire. In addition, 42% said they felt insecure and lacked control over their financial future.
Mkhizeh said South Africans’ top financial concerns are the fear of running out of money in retirement and unexpected financial challenges such as high medical bills if they don’t have enough savings as a safety net. It revolves around the risks it faces, he said.
“Our survey results show that one in five South African adults do not have any medical assistance, 25% do not have an employer pension or provident fund, and have no retirement savings. None.” These stats are quite surprising, given that 46% of respondents admitted that they struggled to meet basic monthly needs such as food and rent. It doesn’t matter,” Mukhize says.
Retirement health care costs tend to rise significantly, yet 62% of respondents did not contribute a specific savings vehicle for their retirement health care needs. Given that 40% cite lack of access to the treatment and long-term care they need in old age as a major financial concern, Mkhizeh said, this highlights significant gaps in retirement planning that need to be addressed. said to show. DM
