Alexander Forbes Group Holdings' latest Member Insights shows only a sliver of savers look set to reach the commonly used 75% income-replacement benchmark by retirement. Vickie Lange, the company's head of solutions enhancement, put it bluntly: "Nine out of 10 contributing members are still not on track to replace at least 75% of their final pensionable salary, so there is considerable work to be done."
The analysis spans over 1.1 million active contributor records across more than 310 funds and roughly 2,300 employers. It assessed how preserving savings, contributing enough, staying invested long enough, and handling short-term money stress shape retirement income outcomes.
South Africans have found it tough to build nest eggs as the economy has limped along and household costs climbed. Over one-third of the workforce - around 8.5 million people - has no job.
Financial pressure has also led many to tap retirement pots early under a system launched in September 2024 that allows limited pre-retirement access. Alexander Forbes says payouts total roughly 17 billion rand since then.
Retirement readiness data is the clearest measure of long-run financial health. Market Briefs covers that picture free every morning.
According to the report, reaching a 75% replacement rate typically means setting aside 15% of pay for 40 years. Right now, the average contribution sits at 11.2%. Timing matters too: while retirement at 65 is available, most people opt to leave the workforce as early as 61. "The expected replacement ratio is 45% with a normal retirement age of 60, and that jumps to 68% if they stay five years longer to the age of 65," Lange said.
OECD figures underscore the stakes: the average South African can expect retirement income equal to 17% of what they earned while working, with Brazil at 96% and Turkey at 84%.
More people are improving their odds than a few years ago, but the math is still tight: contribution rates, how long you stay invested, and whether you preserve savings through rough patches all add up. If you want your future paycheck to feel familiar, today's habits - not tomorrow's hopes - decide the outcome.
One in ten on track is a number worth sitting with. Get the free Market Briefs daily newsletter and think it through.
