By Dorothy Avvakoumides*
Picture a ‘typical’ breakfast for two at home. Two slices of toast each, with cheese, plus two eggs and milk for your coffees or tea. Ordinary, unremarkable, the kind of thing you don’t think about twice.
Until you look at what this daily routine will cost you in retirement.
Whereas this breakfast could cost you around R41 today, using today’s average prices, inflation could easily push that cost to closer to R180 in only 20 years!
Average inflation of between 6% and 8% since 1995 has pushed this small sample of breakfast ingredients from R4.70 then to the roughly R41 it costs today. Project that same inflation forward, and suddenly you might look at your retirement plan very differently.
The part inflation doesn’t tell you
Beating inflation is only half the battle. The other half is having enough saved in the first place, and on this front, the industry numbers are sobering.
Retirement specialists have long used 75% of your pre-retirement income as the benchmark for a comfortable retirement. That is if you hope to enjoy a similar lifestyle once your biggest costs (commuting, work clothes, retirement contributions themselves) fall away.
Industry figures, however, show that the actual net replacement ratio most South Africans are on track for is between 30% and 38%.
Here’s what that gap looks like in real terms.
If you were earning, say, R100,000 a month before retirement, then you’d need around R75,000 a month afterwards. If, however, your saved funds allow only for a 30% replacement ratio, you’ll have only R30,000 available every month.
That means a rather severe scaling back of your retirement ambitions.
Why your investment strategy has to work harder
Avoiding this situation of old-age costs outrunning your saved funds isn’t as difficult or alarming as it may sound. The key is for your investments to grow at a faster pace than inflation.
Because, in reality, if your retirement fund grows at 5% a year while inflation runs at 7%, you’re losing buying power every year. However, if it grows at 10% while inflation sits at 7%, you’re gaining about 3% in real terms, and that’s the number that actually matters.
It’s only human nature, but many people choose conservative, low-risk investments because they fear losing money when markets appear risky.
The problem is that if you’re planning for a 20 or 30-year retirement, playing it too safe is its own risk. You might not like the idea of holding some equities because of the risk of a market correction, but they have historically been one of the most reliable ways to outpace inflation over the long term.
What you can do about it
There really is very little that we as individual investors or pension fund contributors can do to influence the market. So, we have to accept that prices may rise and they may fall.
What we can control, however, is the habit of continuing to contribute to retirement funds and savings every month. The most crucial discipline is to stay invested when markets get bumpy because you lock in your losses if you sell when they bottom out.
And be proactive: review your retirement strategy regularly and keep an eye on whether it’s getting you to the replacement ratio you’re going to need when you retire.
The true test of your retirement savings isn’t the number on your statement. It’s what that number can still buy you, and whether you’ll be able to splurge R180 every morning on a simple, home-cooked breakfast in 20 years’ time.
*Dorothy Avvakoumides is a consultant with Brenthurst Wealth employee benefits in Fourways.
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
