South Africans are notorious non-savers and are ill-prepared for retirement when it comes. All is not lost, say financial planning experts Bruce Cameron and Wouter Fourie. They shared their thoughts with Business Maverick associate editor Ruan Jooste in a recent webinar.
Pensioners around the world have been affected in one way or another by the consequences of Covid-19, but in South Africa, the situation for retirees is far worse, for several reasons.
For one, nine years of ANC misrule under former president Jacob Zuma, which saw corruption become endemic and service delivery collapse, has resulted in stagnating economic growth over the past five years. This performance was reflected on the JSE, which has delivered poor returns for half a decade or more, with dire results for savers.
But the real damage happened before Covid and before the Zuma years, and was caused by pensioners themselves -- either because they did not save enough, or they invested in poorly performing pension products or made high-risk investments.
Recent research published by Alexander Forbes suggests that 85% of pensioners have not saved enough for retirement, and the average replacement ratio of a pension is only about 20%. A replacement ratio is the percentage...