RETIREMENT PLANNING
HOW MUCH MONEY DO YOU NEED?
IT IS AS IMPORTANT TO HAVE A DIVERSIFIED INVESTMENT APPROACH IN RETIREMENT AS IT IS WHILE ACCUMULATING WEALTH.
Actuaries have worked out a very basic formula to help you reach retirement targets.
- TO RETIRE AT AGE 55
You will need to have saved 12 times your average annual income.
- TO RETIRE AT AGE 60
You will need to have saved 11 times your average annual income.
- TO RETIRE AT AGE 65
You will need to have saved 10 times your average annual income.
HOW DO YOU REACH THESE TARGETS?
To get to this target it has been calculated that you should save 15% of your salary for 30 years or 10% of your salary for 40 years. If you are not saving at least 15% of your salary via a pension or private savings plan, your retirement is under threat.
Fear and anxiety about market volatility coupled with a low growth environment often drive retirement investors to low risk investment options in an attempt to protect their capital.
Avoiding risk in retirement is prudent in many instances, but in view of significantly improved longevity this may have the unintended outcome of completely depleting capital.
By taking on fewer growth assets the investor is effectively reducing his/her income-earning potential by at least ten years, compared with an investor who included a balanced type portfolio in the overall investment strategy.
LOW RISK MAY DELIVER AN UNINTENDED HIGH RISK SITUATION: Depleted capital and many years of living still ahead.
Living to a 100 was considered something special and unique three decades ago as average life expectancy was around 70 for women and between 60 and 65 for men. Thanks to healthier lifestyles and medical advances living to 90 and older is nothing out of the ordinary any longer and retiring at 55 or even 60 not realistic. Contributing to retirement funds during income earning years should be an investment and savings priority.
In the richest country of the world, the United States, the pension bomb is ticking as millions of “baby boomers” (the generation of Americans born 1945 to 1954) head towards retirement in their millions with under funded pension fund liabilities.
in SA the problem is equally big – if not bigger
The state pension, currently R1520 per month, is essentially a social safety net for the very poor. It can never be seen as the type of pension that anyone would like to look forward to. Therefore, there is likely to be only two sources of future pension funding for most South Africans – their company sponsored funds or the individuals themselves.
And herein lies the problem. The average South African, although reasonably well educated and employed on a good salary, has no idea how his or her pension fund works. It is only when they start approaching retirement that the make an effort to find out what the pension benefits are likely to be – and then it is often too late.
Do you understand your retirement fund’s rules and how they affect your retirement? If not, speak to an advisor.
It has been estimated that only about 4% of South Africans – and that is a very liberal calculation – can afford to really retire in the conventional sense of the word, i.e. stop working and live off a pension for their rest of their days.
For the rest it is going to be a case of working longer, working part-time for extra money, living off relatives/family/children. And even those who happen to be marginally financially independent might consider working for longer to ensure that their capital is not threatened by retirement.
We often come across people who want to retire at 55, or at the first opportunity that their company allows. This is very foolish as most people under-estimate the value of a regular income. Our advice is to hang on a income for as long as possible, especially if you are getting closer to retirement and have not yet put enough money away.
Every year that you delay cashing in on your pension (and start drawing on your capital) means more growth in the portfolio and more contributions into the fund.
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.
Angelique Anderson joins our Pretoria office as an Administrative Assistant, bringing over 24 years of experience across the financial, legal, and executive support sectors, both locally and internationally. Her meticulous attention to detail, discretion, and extensive knowledge of asset finance and compliance make her an invaluable addition to our team.
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.
