How much to save for Pension?

[Whatzmyname]

Anyone have an idea how much an average person has to save to have a decent life when going on pension? Is there a calculator or something that can give you an idea of the minimum I should be saving?

 

[Alton Turner Blackwood]

Save at least 10% of your income, but there's no hard and fast rule. Just remember, whatever you put away now, you will receive back compounded once you've retired.

 

[ToxicBunny]

More than you can afford at the present time.

 

[creeper]

Save at least 10% of your income, but there's no hard and fast rule. Just remember, whatever you put away now, you will receive back compounded once you've retired.

Some are talking about 20% = 80% of your salary when you retire.

 

[Fuzzbox]

Depends on how old you are now.The younger the better.

 

[rrh]

Anyone have an idea how much an average person has to save to have a decent life when going on pension? Is there a calculator or something that can give you an idea of the minimum I should be saving?

Best speak to a broker.

Depends how old you are, but an absolute minimum of 10%, preferably more.

NB: A broker will give you estimated maturity values based on x% compound growth. I would use 2.5% to 3%

 

[supersunbird]

My minimum is 15%. 20% preferably. From 1 March 2015 you can safe 27.5% and get a tax benefit on that.

 

[CaffeinePirate]

I'm on 10% at the moment, and my broker seems to think it's okay for now (I'm 23) I'll do some varied stuff later though

 

[Garson007]

15% of your yearly salary and 27.5% from next year onwards.

You seriously will never get a better deal than having between 18 and 40 percent of an investment being funded by the taxman.

 

[Shake&Bake]

Some are talking about 20% = 80% of your salary when you retire.

Conventionally you'd want to be at 15% of your salary from the age of 23 years old for +-40 years to end up at 80% of what your earned over that time. And that's borderline comfortability.

For the youngsters, start as early as possible with a small amount if you can't manage the status quo amounts. But then then at least start a Retirement Annuity every year after that, gradually increasing the amount you save every year.

That's in a nutshell really.

 

[Arthur]

Rough rule of thumb: In today's terms, expect about 4% of your capital sum as an annual income.

So, in today's money, if you want R20K per month (before tax) when you retire, you'll need R6m saved and working for you to retire on.

Fire up Excel and project the value of money over the rest of you life. There's a future value function.

 

[archibald]

Get an Actuary to calculate what is required and purchase back pension.There is no other way.

 

[MickeyD]

Rough rule of thumb: In today's terms, expect about 4% of your capital sum as an annual income.

So, in today's money, if you want R20K per month (before tax) when you retire, you'll need R6m saved and working for you to retire on.

Fire up Excel and project the value of money over the rest of you life. There's a future value function.

Agree but it must be stressed that all your debt must be settled by then. You cannot have a mortgage bond, car loan, etc. outstanding when you go on retirement.

 

[OGroteKoning]

/snip
Just remember, whatever you put away now, you will receive back compounded once you've retired.

And the Rand would have devalued. So "compounded" value means little without taking the devaluation of the Rand into consideration.

So what you need to do is calculate what you live on currently (without any liabilities). Escalate that over the years to retirement and then apply a devaluation factor as well bringing inflation into account. This all provided your house and cars are paid off. It is not the simplest calculation in the world, so ask a broker to assist.

 

[MickeyD]

10 working days left for me before I launch into this phase of my life...

 

[lholhos]

This is going to be hard, basically I would like to retire at 55. Now if i want to retire at 55 with 75% of my last cheque and with 100% percent protection against inflation, I need to save 34%. if I retire at 63 i will only need save 18.5% and I am currently saving 12%.

 

[patrick]

It always depends, but I've given it a fair amount of thought. Here's a blog post I wrote on it a while back: http://investorchallenge.co.za/the-only-way-to-get-rich/

It mostly depends on how much you want to be able to spend every year after retirement. Take that figure, and multiply it by 25 and you will have an amount of cash that will most likely never run out and keep up with inflation. Then you can use a compound interest calculator which I also put together and see what you need to do to reach that value in todays money: http://www.investorchallenge.co.za/calc_compound.php

 

[geezer]

I must say that I am very satisfied with my pension fund growth provided by the company I am employed with. It has grown on average R350K per year over the last 4 years, which equates to about R30000 per month. However, the first 20 odd years the growth was a bit slow, but since I reached R1million, the growth has been a lot steeper. Currently at about R4.25million with another about 8 1/2 years to go before I will start to consider retirement.

 

[TheGuy]

Are we talking 20% net or gross?

 

[lholhos]

Are we talking 20% net or gross?

For me, its gross.