How Much Do You Need to Retire Comfortably in South Africa?
When the hypothetical Johannesburg accountant Susan turned 55, she finally opened the retirement statement she had been avoiding for years.
Like many South Africans, she had always assumed retirement was something she would figure out later. There were school fees to pay, a bond to settle, ageing parents to help support and the endless curveballs that life tends to throw at even the best financial plans.
What she discovered was unsettling. The retirement she had imagined — weekends away with her husband, occasional trips to see her grandchildren and enough money to cover rising medical costs — was going to require far more savings than she had expected.
Susan’s story is far from unique.
For most working South Africans, retirement planning sits somewhere between a distant dream and a nagging source of anxiety. We know we should be saving. We know time is running faster than we’d like. But knowing where to start can feel overwhelming.
Retirement is not a destination reached when you stop working, but a long-term journey shaped by continuous planning, prudent decision-making, and active management.
Why most South Africans are not on track to retire
Ask almost any South African in their 40s or 50s what happened to their retirement savings plan and you’ll probably hear a familiar answer: life happened.
Over the years, salaries have had to stretch further as households grapple with rising living costs, debt, school fees and the financial responsibility of supporting extended family members.
Many people have dipped into savings during difficult periods or changed jobs without preserving their retirement benefits, leaving them with far less than they had hoped for later in life.
Recognising the financial pressures facing South Africans, the government introduced the two-pot retirement system, which came into effect on 1 September 2024.
The reform allows retirement fund members to access a portion of their retirement savings before retirement in cases of financial need, while preserving the remainder for retirement. The intention was to provide relief without forcing people to resign from their jobs simply to access retirement funds.
However, the system has also highlighted the extent of the financial strain many South Africans are under.
According to Momentum Corporate, more than 38 148 claims were received within the first 11 days after the latest withdrawal window opened on 1 March 2026, with a significant number of members making repeat withdrawals from their savings pots. This figure relates specifically to Momentum’s FundsAtWork umbrella fund, which accounts for about 8,6% of its membership, rather than the industry as a whole. (Source: Momentum Corporate two-pot withdrawal update, March 2026.)
The company has raised concerns about a growing pattern emerging among members who have already accessed their retirement savings. Data shows that people who withdraw once are increasingly likely to return to the system year after year.
The trend paints a sobering picture. While the two-pot system has provided much-needed financial relief for thousands of households, it has also revealed how many South Africans are relying on retirement savings to cope with immediate financial pressures.
Every withdrawal may help address immediate financial pressures, but it also reduces the amount available to generate an income in retirement, making the goal of retiring comfortably even harder to achieve.
As a result, many South Africans reach their later working years with significantly less saved for retirement than they had planned.
According to figures by the National Treasury, only around 6% of South Africans retire comfortably. That means the overwhelming majority either continue working, depend on family support or are forced to significantly reduce their standard of living in retirement.
It isn’t usually because people don’t care about their future. It’s because retirement competes with today’s realities. When you’re choosing between increasing your retirement contribution and paying for your child’s university fees, the future often loses out.
How to calculate your retirement number
One of the biggest mistakes people make is asking, “How much money do I need to retire?”
A better question is: “What kind of life do I want when I retire?”
Picture a typical month in retirement. Will your home be paid off? Do you want to travel? How often will you visit family? Will you still own a car? What medical expenses might you face?
For some people, retirement means downsizing and living a quieter lifestyle. For others, it means finally pursuing passions they never had time for during their working years.
Financial planners increasingly encourage people to start with the lifestyle they want and work backwards from there.
Retirement is ultimately about replacing the income that currently pays for your lifestyle. The clearer you are about the lifestyle you hope to maintain, the easier it becomes to determine how much you’ll need to save.
The rule of 300 explained
Retirement calculations can quickly become complicated, which is why many financial experts use a simple guideline known as the “rule of 300”.
The idea is straightforward: take the amount you expect to spend each month during retirement and multiply it by 300.
For someone who believes they will need R25 000 a month to live comfortably, that translates into a retirement target of roughly R7,5 million.
Someone wanting R40 000 a month would need significantly more.
*This is a simplified guideline only, the actual figures depend on your assumed drawdown rate, life expectancy, and inflation, and will vary from person to person.
At first, those figures can feel intimidating. Many people experience a moment of panic when they see them. But financial advisers often point out that the purpose of the exercise isn’t to scare people. It’s to provide clarity.
Imagine setting off on a road trip without knowing the destination. You would have no way of knowing whether you’re on the right route. The same principle applies to retirement. You don’t need to reach your target tomorrow. You simply need to know where you’re heading.
Building wealth for retirement: why your investments matter
Once that monthly retirement income target becomes clearer, the next question is not just how much you save but how your money grows.
This is where many retirement plans quietly fall apart.
Saving alone is rarely enough. Inflation erodes value over time, and relying on a single type of investment exposes you to unnecessary risk. A portfolio that is too conservative may not grow enough, while one that is too aggressive can become volatile right when stability matters most.
That’s why financial planners consistently emphasise one principle: diversification.
Diversification means spreading your money across different types of investments, so your retirement outcome doesn’t depend on one market, one asset class, or one economic cycle.
In practice, that can include a mix of income-generating investments, growth-focused assets, and more stable, capital-preserving instruments.
The goal is not complexity but balance.
To illustrate how this principle can be applied in practice, here’s an example of how one provider structures its offering. Everest Wealth position their solutions around combining income-producing instruments with longer-term growth exposure.
Products like income-focused portfolios and living annuities are often used within that framework: one part aimed at generating steady cash flow, another aimed at sustaining growth over time.
The idea is simple: retirement planning doesn’t fail only because people save too little. It also fails because savings are not structured to last. Diversification helps bridge the gap between accumulation and sustainability.
What if you are starting late?
This is the question that keeps many people awake at night. What if you’re already 50? Or 55? What if retirement suddenly feels closer than ever and your savings are nowhere near where you hoped they would be?
The truth is that many South Africans start later than they intended. Some spend years building businesses. Others focus on raising families. Many experienced retrenchments, economic downturns or unexpected expenses that disrupted their plans.
Starting late does not mean giving up. It may mean contributing more aggressively, working a little longer than originally planned or adjusting certain expectations. But it does not mean the opportunity to improve your future has disappeared.
Financial planners often say the most dangerous response to being behind is doing nothing. Even people who begin saving seriously later in life can make meaningful progress when they develop a clear plan and stick to it consistently.
The important thing is not the age at which you start. It’s the decision to start.
How to close the gap between where you are and where you need to be
Retirement planning can feel intimidating because people often focus on the entire mountain instead of the next step.
The reality is that comfortable retirements are rarely built through dramatic financial moves. They’re built through small decisions repeated consistently over many years.
Increasing your retirement contributions each time your salary rises can significantly improve your long-term retirement savings. It is also important to preserve your retirement benefits when changing jobs rather than cashing them out.
Reducing unnecessary debt can free up more money for saving and investing, while maintaining consistent investments, even during periods of economic uncertainty, can help build wealth over time.
These actions may not feel life-changing in the moment, but over time they can make a remarkable difference.
Most importantly, try not to measure your progress against someone else’s journey. There will always be people who started earlier, earned more or had fewer financial responsibilities along the way.
Retirement is personal. The goal is not to achieve a perfect number. The goal is to create enough financial freedom to enjoy the next chapter of your life with dignity, independence and peace of mind.
And whether retirement is 30 years away or just around the corner, the best time to take that first step is today.
Notice and Disclaimer
This article is for general information only and does not constitute financial advice as defined by the Financial Advisory and Intermediary Services Act (FAIS), 2002. Investment returns are not guaranteed and depend on the performance of the underlying assets. Any product references are illustrative and do not constitute a recommendation. Any examples or figures used are for illustration only and are not guaranteed. Past performance is not indicative of future performance. Income tax is payable in accordance with SARS rules. Personal information is handled in line with the Protection of Personal Information Act (POPIA), 2013. Speak to an accredited Everest Wealth adviser and obtain the full risk disclosure document before making any investment decision. Everest Wealth Management (Pty) Ltd is an authorised Financial Services Provider (FSP 795) and a registered credit provider NCRCP 21504.
