Fifteen is the golden number for retirement

We are constantly measuring our wealth and health when it comes to our retirement. The number of steps we take per day, our average heart rate per session, our smart shopper points, rewards, e-bucks, share portfolios … name it and we measure it.

But, the one thing that is easy to neglect is measuring whether we’re on track for retirement. Sanlam simplifies saving for retirement by answering the two most pressing issues as outlined in the 2017 Sanlam Benchmark Survey: What’s the amount I should retire with? How much must I save (monthly/annually) to retire comfortably?

What’s your number?

Fifteen is your new best friend. It’s the number that’ll make calculating what you need for retirement a simple affair. By the time you retire at age 65, you need 15 times your final salary saved to afford an inflation-linked annuity to replace your salary. That’s your number.

Am I on track?

Based on the goal that you should have a multiple of 15 times your final salary saved, the following table sets out some goalposts along the road to retirement:

Years worked Multiple of current salary saved
5 1.2
10 2.3
15 3.7
20 5.3
25 7.2
30 9.4
35 12.0
40 15.0

The table is based on the following assumptions:

  • You save 15% per year of your annual salary (including the annual bonus/13th cheque)
  • Investment returns are calculated at 10% per year
  • Salary increases of 6.5% per year
  • In the event of a married couple, both members contribute towards retirement savings

You also need a birds-eye view of the value of all your current assets and investments versus your collective or total debt owing.

Now that you know what you have and what you owe, it will give you a better grasp of how to reach your retirement savings goal. If you’re lagging behind a little or struggling to make saving a priority – just remember that it is never too late to start saving.  Contact an accredited financial planner who can holistically assess your finances, and help you attain your short- and long-term financial wealth goals.

What if you haven’t started saving at age 25?

If you haven’t yet started saving by the age of 25, saving only 15% per year will unfortunately not lead to a multiple of 15 times your final salary at retirement. However, take heart that it’s never too late though – you just need to save more every month. The following table sets out the percentage of salary needed to be saved if you are starting saving for the first time at a later age:

Start saving at age Percentage of salary needed to save
25 15%
35 24%
45 43%
50 60%

 Which products should you invest in when it comes to retirement saving?

If you’re seeking flexibility, choice and increased accessibility to your investment, consider a combination of products. You may contemplate saving not only in a traditional pension or provident fund, but also with retirement annuities, a tax-free savings account, retail government bonds or an ordinary unit trust.

Remember, if you don’t have a goal, there is nothing to aim for. Make sure that you know what your ‘final number’ is and make the best possible effort to achieve it.

*Of course, everyone’s financial situation is different so it is always advisable to speak to your financial planner or advisor for advice tailored specifically to your needs.


  1. The first golden rule is to never cash out your retirement savings when changing jobs. This is still the biggest mistake that members make during their lives. Do not be tempted to access your money to pay off debt, buy consumables or upgrade your lifestyle. Do not even cash in your allowable third of your pension fund or retirement annuity, as the long-term need for a higher monthly pension is much more valued than the short-term luxuries that you are going to buy with your money.
  2. Retirement savings should be as important a financial priority as a well-deserved holiday, rather than just a nice-to-have budget item. Know exactly what percentage of your monthly salary and annual bonus you have to save, and put in place an automatic debit order to keep you from the temptation of spending your salary on consumables.
  3. Invest wisely, tax efficiently and know exactly what you are paying in fees. Seek advice from a certified financial advisor and be sure to invest according to your investment time horizon. Investing for retirement is a very long-term goal, so make sure you are sufficiently invested in aggressive assets (such as equities or listed property) to give you inflating-beating investment returns of at least 10% per annum after fees.


Source: Risk Africa