Article Sidebar
Article Details
Issue
Section
Articles
Copyright for articles published in this journal is retained by the Actuarial Society of South Africa
Actuarial Society of South Africa 2020
Content on this site is licensed under a Creative Commons Attribution 4.0 Licence.
For details see: http://creativecommons.org/licenses/by/4.0
The views and opinions of this journal are, unless otherwise stated, those of the authors.
Editorial opinion or comment is, unless otherwise stated, that of the Editor and publication
thereof does not indicate the agreement of the Actuarial Society of South Africa.
Main Article Content
Retirement adequacy goals for South African households
Abstract
Despite the importance of retirement adequacy goals to public policy, retirement fund design and personal financial planning, there has been little formal research on the estimation of retirement adequacy goals for South African households. This research derived estimated retirement
adequacy goals for employed one- and two-adult households. A consumption-smoothing model with a minimum-income underpin was developed to estimate wealth–earnings ratio goals using data from the Income and Expenditure Survey 2005–2006. Household wealth–earnings ratio goals were estimated to be between 10,5 and 18,2 times annual salary depending on retirement age, household composition, income, location, age, education, household income distribution, home ownership and salary support. Considering current retirement savings rates, retirement before age 67 is unlikely to be affordable for most households.
adequacy goals for employed one- and two-adult households. A consumption-smoothing model with a minimum-income underpin was developed to estimate wealth–earnings ratio goals using data from the Income and Expenditure Survey 2005–2006. Household wealth–earnings ratio goals were estimated to be between 10,5 and 18,2 times annual salary depending on retirement age, household composition, income, location, age, education, household income distribution, home ownership and salary support. Considering current retirement savings rates, retirement before age 67 is unlikely to be affordable for most households.
