Predicting pension amount based on historical growth data.

geezer

geezer

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Would it be possible to "predict" what a persons pension total will be if historical data since February 2006 is available on a Excel spreadsheet? It is obvious that it will only be a prediction, and the actual amount will be influenced by a lot of factors. As a reference, I have attached the spreadsheet with the data since 2006. I have a colleague who needs to make a decision whether he can go of on 55, 60 or should he stay until 65. He currently is 50 years old.
 

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Assuming no additional contribitions and growth of 10% pa:

at 55 he will have ~R4.8 mil giving a income of ~R17thousand per month (in todays R value)

at 60 he will have ~R7.5 mil giving a income of ~R22thousand per month (in todays R value)

at 65 he will have ~12.5 mil giving a income of ~R30thousand per month (in todays R value)
 
Its rare to retire early these days. I'd advise aiming for 63 or so at least. Also check out the pension scheme's buy in tables. Essentially the older you are the more value you get out of each rand you give. For instance if you retire at 63 they will give you perhaps 7.8% of each million you invest per annum. If you retire at 55 that could be 4.4% per million. Due to how many years they work out on average you will live and how much pensions grow near the end the difference in retirement standard can be very big if you put it off a few years.
 
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