The average formally employed South African would need to save between R2,425 and R17,158 every month to retire comfortably, depending on their age when they start and savings strategy.
The latest 10X Retirement Reality Report shows that only 6% of South Africans are on track to retire comfortably.
Household Saving Rate in South Africa decreased to -1.20% in the third quarter of 2025 from -1.10% in the second quarter of 2025.
A negative household savings rate means that, on average, households are spending more than their disposable income.
This indicates that consumption is financed by dipping into existing savings, selling assets, or increasing debt.
With the country’s poor savings rate, many workers face the prospect of working far longer than expected.
Kanyisa Mkhize, CEO of Sanlam Corporate, warned that most working South Africans may have no choice but to keep working until they are well into old age.
Mkhize highlighted a major disconnect between what people expect and what is financially realistic. “The consumer portion of a Sanlam study showed that respondents expected to retire comfortably at 60,” she said.
“However, a separate piece of work by Sanlam Corporate showed that South Africans, on average, may need to work a full two decades past the normal retirement age to maintain their lifestyle.”
According to Marnus Mostert, a franchise principal and financial adviser at Consult by Momentum, many people feel overwhelmed when they first see how much they need to save.
“When it comes to South Africa’s savings culture, I don’t think the issue is as generic as it’s often portrayed,” he said.
“Yes, starting too late, lifestyle inflation, expensive vehicles, and instant gratification all play a role,’ he said.
“But the bigger gap, in my view, is that both individuals and advisers underestimate what good, out-of-the-box planning can achieve with the money people already have.”
What you need to earn
To put the numbers into perspective, Statistics South Africa’s latest Quarterly Employment Survey shows that the average salary for formally employed, non-agricultural workers has reached a record high of R29,490 a month.
For the purpose of the article, this can be rounded to R30,000 or R360,000 a year, which serves as a useful benchmark for income replacement in retirement.
Using realistic assumptions—a retirement age of 65, a real investment return of 9%, and a required retirement income of R360,000 a year in today’s money—the difference between starting early and starting late becomes clear.
If someone starts saving at 25 and only increases their contributions by 5% a year, they would need to put away about R5,500 a month.
Starting at 35 pushes that number to roughly R9,200 a month, while waiting until 45 means needing more than R17,000 a month to reach the same outcome.
However, Mostert argued that smarter contribution strategies can dramatically lower the initial burden. One effective approach is committing to a higher annual savings increase.
If contributions grow by 10% a year instead of 5%, the required starting amounts fall sharply. A 25-year-old could start at about R2,425 a month, a 35-year-old at roughly R4,900, and a 45-year-old at around R11,300.
What you need to save, assuming a 5% increase in what you save per year
| Age 25 | Age 35 | Age 45 | |
|---|---|---|---|
| Retirement age | 65 | 65 | 65 |
| Income required per annum (real terms) | R360,000 (R30,000pm) | R360,000 (R30,000pm) | R360,000 (R30,000pm) |
| Investment yield (%) | 9% | 9% | 9% |
| Annual increase in savings (%) | 5% | 5% | 5% |
| Monthly savings required (to retirement) |
R5,512.95 | R9,219.78 | R17,157.66 |
What you need to save, assuming a 10% increase in what you save per year
| Age 25 | Age 35 | Age 45 | |
|---|---|---|---|
| Retirement age | 65 | 65 | 65 |
| Income required per annum (real terms) | R360,000 (R30,000pm) | R360,000 (R30,000pm) | R360,000 (R30,000pm) |
| Investment yield (%) | 9% | 9% | 9% |
| Annual increase in savings (%) | 10% | 10% | 10% |
| Monthly savings required (to retirement) |
R2,425.08 | R4,930.85 | R11,271.19 |
“This can be positioned as a practical hack for those who don’t have sufficient cash flow early in their careers,” Mostert said.
While a 10% annual escalation becomes steeper over time, it often aligns naturally with career progression, promotions, and income growth.
In this way, retirement contributions grow alongside earning power, making the strategy more realistic and sustainable.
Another powerful, and often overlooked, lever is reinvesting tax refunds. Section 11F of the Income Tax Act allows retirement fund contributions of up to 27.5% of taxable income to be tax-deductible, meaning part of each contribution is effectively funded by SARS.
Reinvesting that tax refund back into a retirement plan can significantly boost long-term outcomes.
As an example, if a 25-year-old contributes R2,425 a month, increases that amount by 10% a year, and consistently reinvests all tax refunds until age 65, they could end up with about 31% more money at retirement.
That translates into a meaningful jump in retirement income, from roughly R30,000 a month to about R39,300, purely through discipline and smarter use of money already being returned by the tax system.
