The 45th Sanlam Benchmark Survey released this week shows South Africans understand the need for early retirement planning but face pressures that delay engagement and lead to short-term decisions.
The survey surveyed 76 stand-alone funds, 130 umbrella fund employers, 30 pensioners and 600 consumers. It found that retirement fund members start engaging with their funds 3.4 years before stopping work and seek advice just 20 months before retirement, despite believing planning should begin around age 35.
Kanyisa Mkhize, chief executive officer of Sanlam Corporate, said retirement confidence is built over decades through decisions on preserving savings, increasing contributions and managing debt. Pensioners who take a cash lump sum now deplete it within an average of 14.6 months.
The survey also found that 50 percent of online consumer respondents had spent money on gambling, betting or lottery activities in the previous three months, with 66 percent using salary or wages. Nearly nine in 10 younger respondents said they would rather have guaranteed retirement income than potentially higher returns.
The retirement fund industry has seen consolidation, with assets under management growing to R5.84-trillion. The two-pot system has increased engagement, with 84 percent of stand-alone funds reporting higher member interaction.
