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Exploring adequate retirement funding in South Africa: a KwaZulu-Natal financial planner’s view.

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The development of several social demographic and economic trends have created the interest among financial analysts and the general population in planning for retirement. By the year 2021 the number of South Africans past retirement age will be an estimated 4.4 million which should account for approximately 7.3% of the country’s population (currently 3.8 million or 6.8% of the population) (Statistics South Africa, 2016). The increase in South Africa’s population at large and longer retirement periods have raised questions about financial preparedness for retirement. Economic issues such as corporate downsizing, capped employer retirement contributions, changing of jobs for greater remuneration and increased daily living costs have shifted the responsibility for retirement financial well-being from employers to individuals. Adequate retirement provision does not necessarily only affect the retiree but also the family unit of the retiree as a whole, as the vast majority of households in developing countries such as South Africa rely solely on one breadwinner. A global financial planning survey “was conducted by the FPI in 2015. The survey shows that only 38% of South Africans are confident that they will achieve their financial life goals, with 55% indicating that they do not know where to start with financial planning (Financial Planning Institute of South Africa, 2015) Gustman, Mitchell and Steinmeier (1995), as sited in (Greninger, Hampton, Kitt, & Jacquet, 2000) reported that, “there is no consensus in literature regarding the definition of retirement. If we do not understand the meaning of retirement, is it possible to judge whether a population is financially prepared?” This question underlines the importance of gathering informative qualitative data such as goals and risk tolerances and quantitative data, in order to develop a capital needs analysis to establish how clients can successfully meet their retirement goals. This paper aims to explore the role of the Financial Planner in the retirement planning process.


Masters Degree. University of KwaZulu-Natal, Durban.