MONEY CLINIC: Help! I'm 35 with no retirement savings plan

A Fin24 user is looking to start a retirement savings plan as it does not form part of company benefits - he would have to pay out of pocket.

He writes: 

I am 35.

I don't have any retirement savings.

What can I do?

Previous financial constraints and obligations did not allow any savings.

The retirement savings needs to be entirely out of my pocket - as per company contract, medical aid and retirement savings are our own responsibility.

Elian Wiener, finance and investment expert and founder of Wealthwoke responds: 

Saving for retirement is incredibly important and the earlier you start the better. It's understandable that you were not in a position to start saving for retirement earlier, but it's critical that you start as soon as possible. Even delaying by an extra 5 years will have serious consequences for you. 

For example, if you contribute R3 000 per month to your retirement savings every month between the ages of 35 and 65 and assuming you earn 8% annual returns on your investment, you will have roughly R4.2m at retirement. However, if you wait until age 40 to start contributing, by the age of 65 you will only have R2.75 million. This big difference is mostly due to the power of compound interest (or the interest you earn on your interest). It's like a snowball effect and just an extra five years can make a huge difference.

Its not compulsory for employers in South Africa to contribute to a retirement fund on behalf of employees. However, many employees do offer this as a benefit and it may be worth putting some pressure on your company to start doing so. 

However, in the meantime, you can start contributing to a retirement annuity in your personal capacity. One of the key benefits of investing for retirement using a retirement fund or annuity is the tax deduction for contributions, subject to a maximum of 27.5% of your income, up to an amount of R350 000 per year. 

If you don't feel comfortable choosing a provider for your retirement annuity yourself, make use of a qualified and recommended financial advisor, who can assist you to get started and help you along your journey. 

Compiled by Allison Jeftha.  

  • Have a money problem that needs solving? Fin24 can help! Send your question to or find the Money Clinic box on the right of our homepage. 

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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