How much money you need to retire comfortably in South Africa
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- čas přidán 23. 07. 2024
- Discover the surprising truth about the cost of retiring in South Africa in this eye-opening video. Join us as we delve into how much money you actually need to retire comfortably in this beautiful country. Whether you're considering retiring abroad or simply curious about the financial aspects of retiring in South Africa, this video will provide you with valuable insights and essential information. Don't miss out on understanding the real expenses involved in retiring in South Africa!
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Retirement should be a top priority from a young age. Unfortunately, the majority of South Africans will never comfortably retire.
The problem in South Africa is that most people over spend on vehicles and some buy properties which are more than what they need or to impress others. Myself and my wife started with nothing when we finished school we purchased our first property at the age of 22 and we are now 32 with four cash properties which are cash flow positive properties as people say “my house is a asset” but on your basic accounting equation your primary residence is a liability.
We work in China and buy a property in SA with our yearly savings for about 700 to 1mil. We have annuities for our rental income tax deductions, I am trying to move into investments such as the S and P 500 but need to gain more knowledge. Property is my expertise as I know what to buy and where and the bargains in the current economic climate. Our goal by 45 is to own 15 rentals which I believe should be enough. Then to take annuities for tax deductions from the rentals, what is your thoughts on annuities @louisreynhardt?
Best financial advice Shia LaBeouf has ever given
🤣🤣 Thanks my friend. Love the comment 💪🏻💪🏻
This is painful to watch, to be honest.
1) As big as those numbers are, they are as "reasonable" as they come for sustainable retirement living.
2) The estimations immediately exclude everyone I know and most of everyone that they know.
3) This puts a lot of pressure on us young folks because no one wants to see their elders suffer in their remaining years.
Truly believe that only the knowledgeable and focused will survive this storm of emotional and financial bleeding. It's a good time to equip ourselves right now guys, try not to get carried away by meaningless trends.
Unfortunately, it's the sad reality for most South Africans. I think the best advice would be to simply start as early as possible. No matter what your salary is, starting early is the key to reaching your goals. Hopefully, the channel can ultimately help you get to your goals as well. Thanks for watching 💪🏻
@@louisreynhardt I'm already on the journey to success brother. Thank YOU for your contribution to society with the financial information you share.
Thanks Louis. It's good to see more local retirement related content.
Pleasure. Thanks for watching. Glad I can shed some light on this very important topic 🙏🏻
Great video Louis, and such a massively important topic that is not spoken about nearly enough!
Adding to this, the average balanced fund that are used in Retirement Annuities gives a return of below 8%, and if we need to account for inflation of 5-6% and platform fees of 0.3-0.5, this is barely growing your money in real terms.
Another unfortunate reality us that many people who are working hard and saving enough for retirement every month, still ends up being short because they are invested in funds that are either too conservative, or on which the fees are too high.
Investor education is key, and it is great to have a platform like CZcams to freely share this type of content to try and help the masses.
Well done Louis 💪
Thanks man appreciate your support. Absolutely agree. Thanks for taking the time to add value in the comments 💪🏻
Yes you are told to save or invest a percentage of your salary from day 1 but on low pay with high inflation thus is impossible plus if you keep losing your job as I did it is impossible. So many losing or lost jobs. Bad economy is the problem
Unfortunately its the sad reality. Starting early is probably the only way you can mitigate this risk. Goodluck my friend 💪🏻
Good advice, but for 70 to 80% of South Africans this is unattainable.
Unfortunately, it's the sad reality. 😔
I finally found the right side of youtube😂💯🔥as a 19 year old varsity student trying to get rich this gives some added perspective
Welcome my friend. Hope the channel helps a lot. Thanks for watching 💪🏻
If you would retire today (65 years old) you would need minimum of 12 mil to live out your remaining years. This is for middle class living. Now imagine how bad it will be in future...
Absolutely, and most middle-class people will probably never reach the R12m mark.
You don't need that much. I have several prime properties I rent out on AirBnB. I have a 1 bedroom apartment I paid R1.8mn for a year ago and have already received over R300k for in 8 months. Work smart, not hard.
brilliant content - thank you Louis
Thanks so much for watching. Appreciate your comment
First rule. No debt. Everything paid for. This includes everything. Second rule. Scale down before retiring. Third rule. Don't fall into the debt trap again. If you haven't got the spare cash, don't buy it. Forth rule. Do you really need a financial advisor?
Great advice. i Like the practicality.
Thanks for taking the time to add value in the comments 💪🏻
🎯
Agreed no financial advisors,stay away.Property and then sub letting,that is good money
Such a great video. The R5k saving per R1mil was an interesting recommendation. Keep up the good work
Thanks for your comment appreciate it 🙌🏻
This is such a helpful practical video. Thank you Louis. Do you have any videos on practical investing, if one had to suddenly receive a large sum of money like an inheritance for example.
Thanks so much for watching. Appreciate the support. I would say focus on education first. In the meantime, keep it in a high interest account that you have full access to. From there, you can diversify into assets that you understand and can master , whether it's property. Stocks, bonds, or non paper assets like gold or cattle.
Hi Louis. I love your videos my man. Your sessions are precisely what I need to hear - so that I can adjust. One thing that crossed my mind is that it's somewhat a privileged position to be able to discuss whether retirement funds will be enough. In South African townships the picture is much much dimmer. People of working age are not working and getting retrenched. They truly rely on R350 social grant. I'm counting my blessings one by one.
Thanks so much for your comment. Appreciate the support.
You are right. the majority of South Africans are struggling to put food on the table. The inequality gap is too big, which is a tragedy. I hope that those who have the need to learn will be able to benefit from my channel. I have met friends that came from terrible upbringings,and were able to save and invest grants into livestock or small bussiness or side hustles. This infact is very inspiring, and it proves that if there is a will, there is a way. Thanks so much for your comment 💪🏻
I personally dont subscribe to that 80% or 70% of last salary as a calculation. I know this is what most Life Assurance companies in SA have on their websites to work out what you need for retirement. I prefer to use a calculation based on what my EXPECTED EXPENSE is going to be (annually) and times that by min 25 years (yes this is the 4% rule) or better use 30 or 35 Years as the final amount, I need to have saved/invested for retirement.
Thanks so much for your comment and for adding value on the channel. You make some great points. Thanks for the tips.
Moral of the story: increase your earning potential AND asset base now, no matter what it takes.
Great tip. This is something many people neglect.
and bow the 2 pot system is going to erode retirement savings further
The sad reality South Africans face 😪
😂😂😂😂😂
I think the retirement chat is scary but a much needed one. The ultimate guide to retirement by Bruce Cameron I quite sobering, in truth to retire comfortably it will need to be a combination of income generating assets and a RA/pension fund. Because when you get older, your ability to work for income I highly hindered as opposed to when you're younger and energetic. Retirement/pension funds alone are not enough but rather having funds in retirement(through income generating assests) is a must, because cash flow is key.
Thanks so much for sharing. Great book recommendation! I think at the end of the day starting early is the best advice in general. Also, focussing on putting your money in the right places is very important. Saving alone won't help people reach their goals. Thanks for adding value in the comment section. Appreciate the support.
Not to mention inflation 😂
Great video. 👏 The R12,000 monthly budget would just barely cover basic expenses, medical aid and transport for a couple of two - assuming they owned their home. I'm not sure which proportion of South Africans could ever save an investment portfolio of R2,880,000. 😮 Dire indeed.
With the 5% scenario the life expectancy of 30 years for the retirement period seems excessive. Isn't 15 years more realistic, i.e. 65 to 80.
Absolutely, most South African struggle to save basically anything for retirement, never mind larger amounts.
I would say being pro active and starting early is the best solution for most. I will also save for a longer time to mitigate the risk of running out of money.
Biggest issue when calculating your retirement is thinking you are only going to need funds for about 20 years after retirement but due to medical advancements which should be factored in, most will be living much longer than 20 years post retirement.
The average age of death in SA is about 65 years of age but that mortality rate is significantly low due to various reasons I won’t mention here.
Therefore taken into account medical advancement and a mortality rate of let’s say UK, one would need to consider saving for much longer than only 15 to 20 years post retirement.
A good book to read to further understand this is To 100 & Beyond by Wynand Gouws.
lol you wish, its not a given. ppl start getting sick at 55/60. Mortality hits hard. by the time you in your late 60s, you old.
@@jldp24 maybe in South Africa yes
@@seangoss3439 no mate..when ppl get sick they dont tell anyone..your standard of living regresses past 65..
@@jldp24 have you researched the average age of death in other developed countries compared to SA?
@@seangoss3439 I dont care abt the average age in Sa..you stuck on that. I'm acutely aware of our demographics and gini co efficient statistics. I'm talking for all upper middle class populations around the world. The mean mortality age is around 77..Japan maybe slightly higher. Now go read my comment again.
I wish such information was available when I started working, sadly I learned the hard way. Only now I am looking at starting investing in propety to make up for the time lost.
It's never too late to start. I hope this channel can help you reach your goals. Always keep on improving. If you have the wil, you will find a way
Hw old a u, and hw many years to go b4 retirement.
So, since his retirement from cricket, Dale Steyn now gives financial advice🤔
🤣🤣🤣
😂😂😂😂
In short-You will need at least ( minimum) 12x your yearly salary to retire -there must be no debt ,thats the rule. You can also only draw between 4-5%/ year of your pension to be safe.That it! and keep fees low ( try 10x Investments - my choice)
Thanks for adding value in the comments. Appreciate your input. Thanks for watching 💪🏻
Retirement vs resigning, there is a lot we still need to know, with our high taxes 😢.
Absolutely, I hope the channel can help 🙏🏻
So RAs are not going to help that much in our high inflationary environment, right?
RA's alone definitely not. But its still a great tool. Personally I dont believe in RA's but they can be a good way to work towards retirement
@@louisreynhardtwhat is RA. Retirement annuity?
My mom, lives in a humble 1 bed cottage at a very average suburb and she costs me 20k. month on this principle she would require just R5m to get the money to cover her account.She has R240k, sadly there is less than 1% of SA population that will be able to retire and never depend on their family, inflation (real) will always consume their assets faster than they will grow, even in the stock market. Sadly someone earning 15k will never save R3m, and beat inflation.
My rule is save the percentage of your age -10. so if you are 50 years old -10 and that's how much of your salary you should be saving in an investment vehicle and then when you retire you can only spend 50% of your final salary. Now how many people can actually do this.
Else you can live as a family, care for you children and elderly and pass assets between generations, this is the most likely option but requires you have committed families that have more then 3 children per household.
Thanks for taking the time to share and comment on the video. I think at the end of the day starting early is the best advice in general. Theres many ways to approach retirement, but nothing beats starting early. I wish you only well and well done for supporting your parents. 💪🏻💪🏻
Nowadays we're brainwashed to move out once we start to work. 😢
I don't believe in retirement savings... I think one much have passive income (e.g: rental properties that fully paid).
Great way of thinking. You buy assets that create cash flow and appreciate over time 💪🏻
There should be ways for people to push to live well now. What if one never even makes it to retirement? What if one is old and unable to do much? You put so much money away for retirement that may or may not ever happen and forgo happiness or doing things now. Same for insurance. It's crazy.
Absolutely, you literally only live once. But I would say balance is the answer. You can live within your means while enjoying yourself and preparing for your future. 💪🏻🚀🇿🇦
So the 4% rule is for the USA, the same study found that in South Africa it is 3.5%.
Thanks for sharing 💪🏻
Excellent information. A valuable topic too would be tax implications on RA draw downs and if it would be better to rather invest in equities oneself to avoid this tax burden
Great suggestion. I will look into it. Thanks for supporting the channel. Appreciate your comment.
My dream is to retire in the rural areas where i don’t have to pay rates and taxes. Build myself a big house there then go off grid then i dont have to stress about the money i can never have 😅
Sounds like the dream. Complete independence. Thanks for sharing 💪🏻
Don't stop working!
Yes, if you can do what you love.
My dream is to retire in Cape Town .
One day my friend keep working on it 💪🏻
Noooo, you will go bankrupt quickly. You work in Cape Town and retire elsewhere
😢 Capetown levies
Simple: 25 x your gross annual.
Thanks for sharing. Great tip 💪🏻💪🏻
So I only need 20 million rand? Great...
You can have 20m and still struggle with retirement. It all depends on your expenses.
25k expenses now won't be 25k expenses in 10 yrs time. Due to inflation. It will be much higher. Also, if you do save 7,5m at your retirement, put it in money maximiser account (8,5% anual interest) and you will be making double your expenses/ month...making your 7.5m stretch. Of course there will be taxes, but well worth the investment and less stress.
Absolutely, thanks for your comment. At retirement, taxes and inflation are your biggest challenges. It erodes your money without you knowing
Hi Louis it’s guys 😅
I’ve been watching your content for a while now and you really lit a fire in me! You really changed my perspective in “financial health” and I deeply appreciate your selflessness of sharing such valuable information…especially as a fellow South African 🫡🇿🇦
My dream is to be mentored by you (with your wealth of knowledge), because I truly believe with your guidance I would surely take the right step into financial freedom. I saw your classes/course but truth is I’m only a student and will only probably be able to afford your services much later 😅. But it’s fine, I’ll keep saving and hopefully one day we will meet!
God bless my brother 🫱🏻🫲🏾🫡🔥
Appreciate your comment my friend. I wish I could help everyone, but hopefully, the free content on the channel can at least educate those who are willing to learn. Leep up the hard work and always believe in yourself. Thanks again 👏🏻