South Africans may need to work until they are 80 years old to retire comfortably. This is according to new research from financial services company Sanlam. Sanlam looked at data from its 300,000 members.
The company found that most people will have to work an extra 15 years to have enough money for retirement. Nswa Shoniswa from Sanlam says there are several reasons for this. These include starting permanent jobs later in life, low savings rates, and the rising cost of living.
“There needs to be a coordinated effort from stakeholders to help people retire with dignity and not decades past their prime,” Shoniswa said. He noted that it is important to take action earlier.
Workers may miss timely retirement
For example, people need to know about the tax benefits of saving more for retirement. The government offers tax incentives that can make a big difference over time. Many retirement funds also allow people to make extra contributions beyond what is required.
Meanwhile, the South African Revenue Service (SARS) reports that nearly 2.5 million people have taken money out of their retirement savings. SARS has received many applications from individuals wanting to access their funds since the launch of the two-pot system five months ago. This has resulted in over 43 billion rand being paid out so far.
SARS has reminded pension fund members about the taxes they may have to pay. Tax rates range from 18% to 45%, depending on how much money people make.
