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#AskaFinancialPlanner: How much retirement savings is enough in your twenties?

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Hi, I have just started my first entry-level job; it does not offer any additional benefits. I want to look into setting up a retirement fund for myself. I know that my monthly contribution is tax deductible but I am not sure how much I should aim to contribute since I am working on a small basic as well as a commission basis. The commission obviously varies drastically from month to month. Should I aim for a monthly contribution that is based on my average commission? I look forward to hearing back from you – Natalie


Hi Natalie, this is one of the most commonly asked questions that any working individual faces. More commonly put as “How much is enough?”  I like to think of it in the following way: What do you want life to be like when you retire? Would you like a holiday home? Would you like to travel every year? What kind of Income would you like to live off? Ideally, these needs and wants should be combined to work out how much you should save monthly towards retirement.

Easy, right? Well, not really. It’s very difficult to picture retirement if you are in your twenties. Not everyone is able to paint the retirement picture which enables us to work out how much should be saved monthly. Since this is you first job which pays a basic salary with commission, I would compile a list of all your expenses to establish whether there is room or a “buffer” to save for retirement.

Most retirement annuities offer a minimum monthly saving between R250 and R350. Some of these retirement annuities would impose penalties for stopping your contributions while others don’t.

Working with this buffer you can then decide on a monthly amount you are comfortable with, without taking into account any commission earned initially. Still try to save when you earn particularly good commission some months and make additional lump sum top-ups into your retirement annuity, if the fund allows for it. This will up the tax benefit for you and ensure you take as much advantage of the tax deduction as you are able to.

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There is flexibility out there when it comes to your options. It’s all about finding an advisor and product provider that understand your current financial situation.

Got a pressing question? Email mariette@hometimes.co.za and we’ll be sure to assist

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Who is Donovan Kylle Beytell?

Donovan KB Money Wise

Donovan is a financial advisor at Money Wise Associated Financial Services who believes in challenging the status quo on how financial advice is currently delivered to clients. He takes pride in showing his clients that financial and other goals are attainable through appropriate planning and affordable solutions. Donovan has completed his Masters in the field of Financial Economics, Honours in Investment Management with distinction and Bachelors of Economics with distinction.





Disclaimer: The information above is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by HomeTimes and Money Wise Associated Financial Services CC. Any expression of opinion is personal to the author and the author makes no guarantee of any sort regarding accuracy or completeness of any information or analysis supplied.


Mariette Steynberg is a qualified economist with a post-graduate diploma in financial planning. She has enjoyed working on holistic financial plans for clients in various stages of life, as well as a development economist assessing the socioeconomic impacts of new developments. When she is not working, Mariette enjoys parenting her quirky, delightful toddler girl. Cloth diapering, Eskimo kisses and the importance of reading to your child are all causes close to her heart. Mariette is passionate about financial education and hopes to use the experience she has gained to share knowledge with HomeTimes’ readership. Her goal is to provide information that is implementable by everyone.

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