This is according to the 10x investments which has published the results of its inaugural South African Retirement Reality Report 2018.
They sought to find out if South Africans are preparing and prepared for retirement based on the results of their Retirement Reality Survey.
It reveals the extent of South Africa’s private retirement savings crisis and its pending impact on government resources in the coming years.
The survey also include the savings disparity among racial groups as well as the divide between men and women.
The report is based on a group of 11.9 million economically active South Africans as determined by Stats SA, those with a monthly income in excess of R7600, through online completion surveys from Brand Atlas samples.
It reveals the extent of the country’s private retirement savings crisis and its pending impact on government resources in the coming years.
“The industry has amassed wealth at the expense of its clients, who frequently discover how poorly their retirement products have performed only when it is too late to do anything about it,” says the founder and CEO of 10X Investments Steven Nathan.
The report states that only 7% of those surveyed had a proper plan and were executing it corroborating the statistic from Treasury that only 6% of South Africans were on course for a decent retirement.
“The fact that 41% don’t have a plan at all underlines the urgency of the crisis. Another 31% describe themselves as having a “pretty good idea” of what they are doing.”
“The remaining 21% saw their plan as somewhat vague, indicative of widespread lack of concern and engagement with the topic of retirement planning,” it says.
According to Nathan, the survey pointed to the gender pay gap in South Africa, where women are understood to earn around a quarter less than their male counterparts, which has a knock-on effect on retirement savings.
READ MORE: Are your retirement savings on track?
“A total of 36% of female respondents said they neither saved nor invested, and 37% saved cash but did not invest it. Only a mere 16% reported investing their savings in order to grow their wealth.”
The Head of Growth at 10X Investments, Emma Heap said if women aren’t investing their money for growth they will have little chance of beating inflation and having enough money to draw a decent income after retirement.