People are surprisingly confident about their retirement plans, so why are so many people underfunded?
In the latest
Retirement Reimagined episode, host Maya Fisher-French and Ester Ochse, head of Integrated Advice at FNB, unpack why confidence does not mean preparedness when it comes to retirement.
While 25-27% of South Africans feel confident about their retirement preparedness, only 10% can actually afford to retire comfortably. This disconnect becomes even more pronounced with age – younger people display the highest confidence levels, yet this optimism crumbles as reality sets in during their 40s and 50s.
This is because people seldom have a retirement plan with specific goals and objectives. Most of the time, it is just a belief that because there is a retirement fund, whether that is through an employer or a retirement annuity, it will be enough.
Not investing enough and cashing in when changing jobs all negatively impact retirement outcomes, yet the wrong investment choices can also impact your ability to reach your retirement goals. Fixed deposits and savings accounts, while feeling "safe," are actually eroded by inflation over time.
In this episode, Ester discusses how to ensure that your retirement plan will deliver decent retirement outcomes, what type of investments are appropriate for retirement, and the importance of understanding how much is enough.
For more information on the retirement survey,
click this link.