Why increase your retirement contributions?
You can’t get time back, but you can get time to start working for you today.
Compound interest is interest earned on interest. This means that, over time, your money doesn’t just grow; your growth grows too. The most important thing to understand is: the longer your money is invested, the more time it has to grow. This means that one of the best ways to maximise your retirement savings is to invest more, earlier.
The example in the image shows how increasing your contribution by R250 a month could grow over time. The numbers are illustrative, but they demonstrate a core principle with retirement investing: time is your edge.
*With the Two-Pot retirement system rules in place, one-third of the additional contribution would be allocated to your Savings Pot, and the remaining two-thirds to your Retirement Pot. Using this example, by 2034, you would therefore have an additional R13 000 in your Savings Pot. You would also have boosted your Retirement Pot by R26 000.
*The examples of investment growth provided are for informational purposes only. The amounts are not guaranteed.
If, after a few years, you decide to stop increasing your retirement contribution by R250 per month, the additional savings you’ve accumulated won’t stop working. Over time, it will continue to grow because of the power compound interest.
The average South African retiree has retirement savings of roughly only two times their annual salary.
Would you be able to live comfortably on two years’ worth of your salary after retirement? And, when last have you checked whether you’re on track to retire comfortably?
We know looking at the numbers can sometimes feel daunting, but:
- You are not alone. We are with you on this retirement savings journey.
- Having a clear view of where you are is the first step towards retiring comfortably.
Use our retirement calculator to see whether you’re on track.
Do you know about the tax benefits you get with retirement savings?
By increasing your retirement contributions, you reduce your taxable income. In short, saving more could mean you pay less tax and could even result in a larger tax refund from SARS.
Remember: “A journey of a thousand miles begins with a single step." You don’t have to have it all figured out, but you can take a single step today.
By increasing your contributions today, you’re giving every Rand more time to benefit from compound interest. Small increases, invested for a long time, equal big savings.
small increases + a long time = bigger savings
- Have you recently received a salary increase or bonus?
- Do you want to give yourself the best chance at retiring comfortably?
- Are you currently on-track with your retirement goals? Check if you are now.
- Can you afford to save an extra R250 each month?
- Have you withdrawn from your retirement fund?
If you’ve answered ‘yes’ to any of the above questions, you are ready to save more. Contact HR to increase your contributions today.
The best increase isn’t necessarily the biggest one. The best increase is the one that has more time to grow.
R250 extra can make a difference. That said, life is expensive. If you aren’t able to increase your contributions today, that’s okay. This isn’t the end of the road. When you do get a promotion, bonus, or salary increase, consider allocating a percentage or fixed amount towards your retirement savings.
Ready to give your money more time to grow?
Increasing your retirement contributions is simple. Contact HR to update your contribution amount and get the power of compound interest working for you.
Explore answers to common questions regarding increasing your retirement contributions.
This amount would depend on your unique situation. Use our calculator to see if you’re on track.
Start increasing your retirement contributions today. With compound interest, a little saved for a long time is a lot.
Get an in-depth guide to your retirement options by visiting this page.
Before withdrawing, it’s important to understand that you may be significantly reducing the amount you end up retiring with. It also means that you would be interrupting your money’s opportunity to benefit from compound growth.
View this page to understand everything you need to know about the two-pot system before making a withdrawal.