How much is enough for a comfortable retirement?


We have been asked this question more times than we can count and unfortunately the answer might differ from one person to the next, depending on his/her personal circumstances, but here are a couple of guidelines to help you along the way.

Quick Rule of Thumb

The following table can be used as a quick guide to see if you are currently on track:

How many years have you been working? Multiple of annual salary that you need to have saved
10 years 2 times
20 years 4 times
30 years 7 times
40 years 12 times

Net Replacement Ratio

Your net replacement ratio (NRR) is the percentage of your income at the date of retirement that can be covered by your pension.

Example: If your annual income at the date of retirement is R800 000 and the pension you can generate with your retirement savings is R600 000, you have a 75% NRR.

Each client’s required NRR differs, but it is unlikely that you will need to cover your full income after retirement. It is most likely that certain expenses will fall away once you retire. You no longer have to travel to and from work, disability insurance will fall away, your children might already be self-sufficient and hopefully your debt levels are very low, with big assets like your house already paid off. According to industry standards a 75% NRR is sufficient to provide you with a comfortable retirement.

A person’s projected NRR is therefore a very good measure to determine if they will have enough saved at retirement.

If you would like to receive a free personal Financial Freedom Audit to determine your current NRR and optimised savings options available, please feel free to contact Alicia at

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