There was once a statistic used by investment advisers to indicate how many people will be able to retire comfortably one day.
Six out of every 100 people, was the figure.
I would say that today this would be closer to three percent.
There are many reasons for this. A combination of slow economic growth, affirmative action and early retrenchments, as well as changes to traditional pension funds. These factors have all reduced the amount of time people have to save for retirement and the amount available at retirement.
Add to this the lower returns on investments over the past five years or so, and the increased taxes on retirement funds.
The taxation on retirement funds reduces, on average, the annual growth of a fund by 1,2 percent per annum.
Many people might not be impressed by such a seemingly trivial percentage, but over time, this reduction can be quite dramatic.
Another stumbling block is the unwillingness of people to reduce their living standards. Many people still carry on living as if nothing has changed and as if good times are around the corner. One only need look at the horrific debt figure. The savings ratio is now less than one percent and people use, on average, 67 percent of their disposable income to pay off their debts.
Quite often, people who retire, have to use a great deal of their retirement capital to wipe out debts.
It's only when people are faced with the bleak reality of not having enough capital to retire comfortably, that the realisation dawns, but then it is usually too late.
It is today far more difficult to build up a nest-egg for retirement than it was 10 years ago.
Taxes are higher, what used to be luxuries are now considered essentials, while investment returns in this country have been seriously affected by the 20-year downturn in the economy.
What is needed is the realisation that things have changed. Individuals cannot rely on the state or their company pension to look after them.
Even at retirement, with what many people think is a very large amount of money, people will have to take far greater care in their investments and investment planning.
You cannot make investments and hope that they will carry you through. Your investment strategy has to be reviewed at least once a year and a new cash-flow projection done, especially if you opted out of the guaranteed pension funds into owner-managed retirement portfolios.